The State Council, or China's cabinet, on Wednesday announced a range of measures intended to boost the country's struggling photovoltaic (PV) industry, which has been plagued by excessive capacity and obstacles in overseas expansion.

China will accelerate structural adjustments and technological improvements in the sector, as well as encourage mergers and restructuring among manufacturers to phase out outdated capacity, the cabinet said in a statement released after an executive meeting presided over by Premier Wen Jiabao.

China will strictly control the approval of new projects that produce polysilicon, PV cells and other related components, the statement said.

The State Council said China will enhance coordination between PV power generators and on-grid service providers, as well as encourage the application of distributed power generation in local communities.

The statement said China will improve its support policies, which include setting on-grid electricity prices according to local conditions and subsidizing the usage of PV-generated power.

The cabinet also promised to give more play to market forces and reduce government interference in the sector.

China's PV industry has had difficulty selling products overseas due to anti-dumping probes initiated by the United States and Europe.

Data from the Ministry of Commerce showed that more than 90 percent of Chinese solar products are exported, with 70 percent going to the eurozone and 10 percent to the U.S. market.

The U.S. International Trade Commission backed Washington's plan in early November to issue anti-dumping and countervailing duties on imports of crystalline silicon PV cells and modules from China, while the EU announced in November that it will investigate alleged state subsidies for Chinese solar panel manufacturers.