China Returns Fire against US Wind and Solar Investigations

January 24th, 2012 by Joshua S Hill

Unsurprisingly, the Chinese Government has hit back against a US investigation into the Chinese export of wind turbine towers to the US, saying that the slowly escalating trade disagreement between the two countries is likely to affect global efforts to curb carbon emissions and could also damage clean-energy cooperation between them.

In fact, this is the second time China has hit back against an investigation into their export of clean energy products. As you know if you’ve been following our series of posts on the US-initiated investigation into the Chinese export of solar panels (started late last year).

“This investigation will not only be harmful to the development of Sino-US new-energy cooperation; it will harm the interests of the US industry, and is not in line with global efforts on climate change and energy security,” said the Chinese Ministry of Commerce on it’s website, regarding the wind turbine investigation (quote from the Guardian, which had a better translation than I did from the Chinese-language press release).

The press release also noted that the Chinese government hopes that the US will respect the relevant laws and facts, and abide by the commitments made at the G20 summit in Cannes, which essentially prohibited new protectionist measures.

According to the Guardian, critics of China’s methods are suggesting that the generous subsidies and preferential treatment the Chinese government offers its clean tech firms is tantamount to unfair competition.

US Investigation into Chinese Solar Panel Subsidies

Again, check out our numerous stories on the solar panel trade dispute for more detail, but for those not following it, a summary of that story is as follows:

The US initiated an investigation into whether Chinese-made solar panels were being sold at unfair discounts. China then retaliated with their own investigation into American support for the clean energy sector.

The Chinese Ministry of Commerce released this press release, stating that they hoped the US would analyze “in an objective manner on the real causes of the incompetitiveness in some U.S. solar panel enterprises, and avoid abuse of trade remedy measures which may hurt normal trade and mutually beneficial cooperation in new energy between enterprises of the two countries.” [sic]

I’m going to withhold from making any personal remarks, as my understanding of trade relations is not enough to clearly explain what appears on the surface to be an American problem, and not a Chinese one. Your thoughts and comments would be most welcome though.

Image Source: Patrick Finnegan

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Tags: America, China, new energy, US

About the Author

Joshua S Hill I'm a Christian, a nerd, a geek, and I believe that we're pretty quickly directing planet-Earth into hell in a handbasket! I also write for Fantasy Book Review (.co.uk), and can be found writing articles for a variety of other sites. Check me out at about.me for more.

dcmeserve

I think it’s fine that China is subsidizing its renewables industries. It’s just that the U.S. should do the same — and this includes levying tariffs on imports, which all other advanced countries do in one way or another. Additional stimulus subsidies should also be given to domestic purchasers of such imports, such as rooftop solar installer companies, to offset the negative impact of such tariffs, until domestic production volume ramps up.

So China says ““This investigation will … be harmful to the development of Sino-US new-energy cooperation”. What is that cooperation? The U.S. sends them money, and they send back their finished products? Just like it is already in most other industries? I don’t think that’s the kind of “cooperation” that is in U.S. interests.
Jeff Sullivan

In my opinion, the Chinese are insinuating that there are other factors within our society which have lead to a lack of competitiveness in domestic solar energy enterprises.

Therefore one must ask, why is it believed that U.S. solar energy firms compete can’t with the Chinese?

Surely, there are numerous factors.

– Subsidies for domestic solar panel manufacturers –
Weaken the competitive edge for these firms; where’s the incentive become more efficient or innovate when your paycheck is ensured?

– Economies of Scale – The Chinese have invested billions into manufacturing these products.

e.g. There is a factory which required $1 million to build and a factory which required $100 million dollars to build. Assuming they are both producing the same product and using similar processes… Which factory would produce the same good at a cheaper unit price?

– Competition drives innovation – Subsidies, like labor unions erode competition and therefore prevent innovation.

– Big Oil and Coal Lobbyists – If it weren’t for these people I believe we would have witnessed a much broader adoption of renewable energy technologies a decade ago.

– Some energy giants still talk about “Oil Sands” as if it’s a reliable source of energy in the future. These people are sponsoring massive advertising campaigns disseminating misinformation to millions of unfamiliar Americans who actually believe what they see on television.

In my opinion, the U.S. government, corporate lobbyists and greed have ultimately deterred the adoption of renewable energies and have forced U.S. solar firms into a position where they are unable to compete.