(Yicai) Dec. 9 -- More than 30 firms representing 90 percent of China's photovoltaic production have signed a voluntary agreement to cut output as part of a wider effort to stabilize the industry and enhance profitability amid ruthless competition.

In an unprecedented collaborative effort, the 33 firms inked the deal at the industry’s annual conference in Yibin, Sichuan province between Dec. 4 and 6. This latest get-together was one of a series of meetings on self-discipline in the industry since October.

China's PV industry has grown rapidly and is a significant player in the global solar market, but overproduction and fierce competition -- sometimes described as “malicious” -- have driven down prices, squeezing profit margins for many companies.

The market wants to know the agreement’s details, including how production quotas will be distributed and how future oversight will be managed. In particular, the regulatory measures and long-term goals of the pact that will play a key role in determining the likelihood and extent of profitability.

Speculation about the details abounds, though nothing has been officially confirmed by the China Photovoltaic Industry Association or relevant authorities, insiders told Yicai. Still, the industry has reached a consensus that measures such as production cuts are necessary to avoid irrational competition.

Cao Renxian, chairman of Sungrow, which develops and manufactures PV products, urged industry peers to avoid overestimating themselves and to consider more difficulties and scenarios, which could help curb impulsive investments. “Do not assume that your business will survive and others will inevitably fail,” he said at the conference.

“Chinese companies seem to find it difficult to form alliances, unlike Middle Eastern oil-producing countries that set up the Organization of the Petroleum Exporting Countries,” Qian Jing, vice president of solar modules giant Jinko Solar, noted at the meeting. PV companies must have self-discipline rather than rely on external regulation, she noted.

“We should not be afraid of so-called ‘malicious competition,’ as some interventions may not be beneficial,” a senior executive from a PV company told Yicai. Still, an industry alliance could lead to useful suggestions and norms because of its deep understanding of demand and internal rules, the person added.

Editor: Martin Kadiev