For some in the United States, the Chinese expansion has uncomfortable echoes of the solar panel and wind turbine industries, in which China went from a bit player to global leader through a combination of extensive government subsidies and low-interest loans from state-owned banks.
"LED lighting could see itself become the next solar, wind or other future opportunity that the U.S. will have given away by failing to address Chinese industrial policies and unfairly traded products," said Michael R. Wessel, a member of the U.S.-China Economic and Security Review Commission, a government advisory panel.
China's rise reflects the industry's changing dynamics. Big multinationals that make light bulbs like Philips, Osram and General Electric have embraced light-emitting diodes, which use one-fifth of the electricity of incandescent bulbs and half the electricity of fluorescent bulbs.
Prices have fallen by nearly half in the past year for low-end, low-wattage LEDs made in China, buyers and manufacturing executives said. Alice Tao, a lighting analyst at IHS Technology, a global consulting firm, estimated that very low prices had allowed Chinese companies to capture about 30 percent of the global market.
But quality is a concern as China floods the market. Instead of lasting a decade like well-made LEDs, the low-priced LEDs occasionally burn out after less than a year, large buyers warn. More commonly, they start emitting what is known in the lighting industry as a "rainbow sherbet" palette of colors.
Even as Chinese manufacturers gain worldwide market share, many are struggling to make a profit. If state-owned banks stop financing the Chinese industry with low interest rates, consolidation may be inevitable.
The frenzied competition is prompting many companies to cut corners, said Li Junfeng, a senior Chinese energy policy planner. "The problem," he said, "is too many manufacturers with very low quality."