Chinese firms unfazed by US grid equipment curbs

Leading Chinese power equipment manufacturers expect a limited impact from the latest restrictions by the United States on bulk-power grid apparatus, citing low direct revenue exposure to the US market, well-diversified global sales networks and manufacturing strengths.

Shanghai-based Sieyuan Electric Co said overseas revenue accounts for less than 30 percent of its total business, with operations spanning more than 100 countries and regions, effectively insulating it from single-market geopolitical fluctuations.

The company added that because detailed implementation guidelines and restricted entity lists will only be finalized after a 120-day review period, the measure poses no near-term operational disruption.

Jinpan Technology echoed this confidence, pointing out that the US directive specifically targets high-voltage equipment used in bulk-power transmission grids. By contrast, its North American portfolio is concentrated on user-side power distribution systems and decentralized power stations, which fall outside the scope of the bulk grid restrictions.

Other major industry players, including TBEA Co and Mingyang Electric, likewise reported that the policy remains subject to further observation and poses no material disruption to their current production, orders or operational strategies.

The corporate responses follow a recent executive order signed by US President Donald Trump that declared a "national emergency" regarding the US bulk-power system.

Citing national security concerns, the order tightens procurement, importation and installation rules for foreign-made electrical equipment — such as large power transformers, generators and battery energy storage systems — while directing the US Department of Energy to formulate detailed implementation guidelines within 120 days.

The move marks the second time in recent years that Washington has targeted foreign grid equipment. A similar executive order issued in 2020 also invoked national security to restrict the import and installation of bulk-power system apparatus. Industry observers believe that such moves have only prompted Chinese manufacturers to step up efforts to diversify their export destinations over the past several years.

Commenting on the measure, Foreign Ministry spokesman Lin Jian said on Thursday that China consistently opposes the over-generalization of national security concepts to suppress Chinese enterprises, urging the US to foster an open, fair and nondiscriminatory business environment.

Despite mounting Western trade barriers, industry analysts emphasize that China's comprehensive industrial supply chain and unmatched capacity remain indispensable to the global energy infrastructure.

China stands as the world's largest manufacturer of electrical equipment. According to the China Electricity Council, China's transformer manufacturing capacity accounted for 60 percent of the global total in 2025, firmly securing the top spot globally for multiple consecutive years.

A report released by Goldman Sachs highlighted that Chinese transformer exports have entered a fast track amid a severe global supply-demand deficit.

Although China currently accounts for only about 4 percent of the US transformer market, the US overall depends on imports for roughly 72 percent of its transformer needs. Underscoring this acute supply shortfall, China's exports of large-capacity transformers to the US surged 182 percent year-on-year in the first two months of the year, according to Goldman Sachs.

Trade figures compiled by GF Securities based on data from the General Administration of Customs further reflect this broad-based export boom.

In July, China's transformer export value reached 5.45 billion yuan ($810 million), up 26.44 percent year-on-year. During the January-July period, cumulative transformer exports climbed 31.85 percent to hit 32.95 billion yuan.

Multiyear supercycle

Lin Boqiang, head of Xiamen University's China Institute for Studies in Energy Policy, noted that global electricity infrastructure investment is entering a multiyear supercycle driven by grid modernization, accelerating renewable integration and explosive computing power demand from artificial intelligence data centers.

China can build transformers and grid substations faster and cheaper than Western counterparts, Lin said, adding that "while trade restrictions may create short-term hurdles in specific markets, the global shortage of critical grid apparatus — particularly large transformers — remains a structural bottleneck that cannot be easily resolved without Chinese capacity".

"With their complete supply chains, reliable delivery schedules and technological edge, Chinese equipment makers are well positioned to sustain robust momentum worldwide, particularly across fast-growing markets in the Middle East, Southeast Asia and Europe," he said.

zhengxin@chinadaily.com.cn