(Yicai) Oct. 17 -- Twelve top Chinese wind turbine manufacturers have signed a 'self-discipline' agreement with the goal to stop their earnings decline caused by fierce price competition.

Goldwind Science & Technology, Envision Energy, Windey Energy Technology Group, Ming Yang Smart Energy Group, Sany Renewable Energy, and seven others will refrain from malicious price-cutting and negative campaigns against rivals, according to the pact inked at the 2024 Beijing International Wind Energy Conference and Exhibition yesterday.

The companies will adhere to legal pricing practices, promote disciplined pricing strategies, and establish actionable industry self-regulation rules, according to some key points outlined in the agreement.

The pact aims to address the issue of cutthroat price competition, said

Qin Haiyan, secretary general of China Renewable Energy Society's Wind Energy Committee. "It prohibits signatories from selling products or providing services at prices lower than their costs."

The pact also requires companies to reject unfair contracts, avoid making unrealistic promises or agreements that exceed their capabilities, and refrain from slandering competitors in the domestic and international markets to gain business advantages, Qin pointed out.

There is an urgency for such an agreement as most leading wind turbine makers are operating at a loss, Qin pointed out. "Vicious price competition hinders the development of high-quality wind power projects and threatens the survival of wind power equipment manufacturers, restricting the sustainable development of the entire industry."

Wind power equipment is a high-value industry with a long lifecycle, said Lou Yimin, senior vice president of Envision Energy. "Customers should focus more on the long-term benefits these devices can bring throughout their operational lifecycle rather than just the product's market price."

The wind turbine manufacturing sector has performed poorly over the past two years. Except for Ming Yang and Goldwind, which saw their net profit jump in the first half of this year, most of their listed peers saw an increase in revenue but not profit.

Sany Renewable's net profit plunged 47 percent in the six months ended June 30 from a year earlier, mainly because of the ongoing price war in the industry.

Wind power has secured a crucial position in China's energy structure. The country's total power generation capacity reached 3.13 billion kilowatts as of the end of August, with wind power accounting for around 470 million kW, ranking third after thermal power at 1.41 billion kW and solar power at 750 million kW, according to the National Energy Administration.

Editors: Tang Shihua, Martin Kadiev