Clean Power

Published on July 16th, 2014 | by James Ayre


Chinese Solar Stocks Surge With WTO Ruling Against US-Imposed Tariffs

July 16th, 2014 by  

A number of prominent China-based solar energy companies saw their stock rise substantially on Monday (July 14), thanks to the World Trade Organization’s recent ruling against the US imposition of tariffs on Chinese solar modules, steel products, and other exports.

According to the WTO, tariffs violate global trade rules — being inconsistent with obligations under the 1994 Marrakesh accord. Notably, though, the WTO also rejected some of the arguments being used by Chinese proponents against the tariffs.

WTO Image Credit: Flag of China on Yangtze River via Shutterstock. Image Credit: Flag of China on Yangtze River via Shutterstock

As far as solar stocks go, they rallied on Monday. Yingli Green Energy rose by 4.8%, China Sunenergy by 5.5%, ReneSola by 3.1%, Trina Solar by 2.6%, and Jinko Solar by 2.8%. The US-based company SolarCity, which relies heavily on imported Chinese-modules also rose, by 2.4%.

Reuters provides more:

In the $7.2 billion Chinese case, the panel found that Washington had overstepped the mark in justifying the so-called countervailing duties it imposed as a response to alleged subsidies to exporting firms by China’s government.

Under the 1964 Marrakesh accords, which also set up the WTO, these duties can only be levied when there is clear evidence that state-owned or partially state-owned enterprises passing on the subsidies are “public bodies.”

The panel found that Washington had produced insufficient evidence for this, and was also at fault in its calculations of the value of the subsidies to Chinese firms producing items like kitchen shelving, grass cutters and even citric acid.

The US is reportedly weighing its options on the matter. US Trade Representative Michael Froman provided a bit of spin on the subject, saying that it was a minor victory because of the rejection of some of China’s arguments. Before concluding: “With respect to the other findings in the panel report, the Administration is carefully evaluating its options, and will take all appropriate steps to ensure that U.S. remedies against unfair subsidies remain strong and effective.”

In related news, China is now the world’s largest solar PV market, according to the Global New Energy Development Report 2014. The eastern powerhouse surpassed Germany to take the top spot.

Among the other interesting findings of the report are that “38.7 GW of new solar PV capacity was installed in 2013, and that out of that total figure 12 GW was installed in China — that’s a 232% increase over the previous year in the eastern manufacturing powerhouse.”

Perhaps the trade war between the US and China is less important than it appears at first glance? The times do seem to be changing.

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About the Author

's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy. You can follow his work on Google+.

  • Joseph Hall

    By Chinese solar panel manufacturers, don’t we mean the Chinese government? Is there a difference?

    • Bob_Wallace

      Many businesses in China are privately owned.

      • Joseph Hall

        Privately owned? In Communist China? I think we all know the money from these companies starts and ends with the Communist government.

        Isn’t that what this trade war is all about? The Communist flooding the market with Chinese government funded solar panels while everyone else goes under?

        • Bob_Wallace

          The Chinese government clearly has subsidized some of its industry.

          The US government clearly has subsidized some of its industry.

          Getting government subsidies and being owned by the government are different things.

          Perhaps you would be well served by reading some objective information about the current state of government and industry in China. Sounds like your current sources might be some old, dogeared pamphlets from the John Birch Society.

          • Joseph Hall

            Hold on there Bob. I’m pro-solar and have my own 4.14 kW system. And I’m up on all the issues.

            But let’s face facts, the Chinese are Communists. Yeah, they talk a good capitalistic game and they try to have it both ways, but in the end they’re Communists. And you and I know that China is desperate for energy. So they’re gaming the system and it’s hurting solar panel manufacturers in other parts of the world….

          • Bob_Wallace

            More than one hundred Chinese solar panel manufacturers went bankrupt, closed, in the industry shakeout a year or so back. If the government owned everything then that wouldn’t have happened, don’t ya think?

            Yes, the Chinese government is playing a very tough game and has been breaking the rules more blatantly than most countries do. Clearly Chinese solar manufacturers have driven manufacturers in most other countries out of business with a combination of cheap labor, low environmental safety practices, and (apparently) illegal government subsidies. And add in some significant industrial spying.

            That’s why the US has pushed back and put duties on imported Chinese panels.
            Communism no longer means what Communism once meant. There’s very little socialism left in China. There is still a lot of central government control.

          • Joseph Hall

            I have to say that I really, really doubt the Chinese government would let market forces take down a Yingli or Jinko or Trina. They’d step in immediately and stop it – primarily because they need the panels. But regardless, they would stop it.

            And if communism in China has changed its stripes, have them hold an election and prove it…

          • Bob_Wallace

            First, China let a large number of small, inefficient manufacturers go under. I was giving you that information to show that not every manufacturer in China is owned/kept afloat by the government.

            Second, stepping in to save their major manufacturers. You mean like we’ve done with our car industry?

            Third, do you not understand the difference between strong central government and a weak central government? Neither have anything to do with democracy, socialism, or capitalism.

            You’re talking ‘last century’ about China. Read some. Understand how things are operating there now. This is not your cold war version of China.

          • Joseph Hall

            I just have a big problem with China, and especially how we look at them in this country nowadays.

            When I was growing up, communism was evil. Period. Then the USSR collapsed and everyone in the USA seems to have wiped their hands and said, “communism is dead”.

            And then we turn around and do business with China like they’re capitalist. They’re not. I just don’t think it’s right to compare the USA saving the car industry or financial industry or our entire economy to the Chinese playing this two-faced game.

            And maybe some things have changed in China. I’ve noticed one thing that hasn’t changed is one party rule by communists.

            Good discussion. Not sure if we agree or disagrees, but good nonetheless….

          • Bob_Wallace

            Communism is essentially dead. Small pockets remain in places like Cuba, but that will last only until the Castro boys kick.

            China is capitalism at some of its nastiest. It’s state-owned/highly supported capitalism that is willing to break the rules for profit. (Not unlike a lot of other corporations.)

            China is basically a big corporation with an army to back it up. And within the boarders there are some smaller, less powerful corporations. But capitalism and market forces is what China is all about now.

          • Joseph Hall

            Well then let’s hope democracy follows….

          • Bob_Wallace

            Who knows what form of government China will end up with.

            At one level they have the sort of democracy now that our founding fathers established – one in which “qualified” males pick the leaders.

            The difference is that rather than base the right to vote on gender and skin color they are basing it on party membership. Pre-qualifying voters based on how the party views the individual.

            It took us from 1788 to 1965 to extend the right to vote to all American citizens and even now we see elected officials attempting take the vote away from some of us.

          • nakedChimp

            Once that happens a lot of people will die and the rest of the world will be freaking out on top of it, as so far democratization hasn’t been peaceful..

          • nakedChimp

            “China is basically a big corporation with an army to back it up. And within the boarders there are some smaller, less powerful corporations. But capitalism and market forces is what China is all about now.”

          • No way

            When did you learn that capitalism is evil then? Two extremes that have done the world little good.
            Have you ever thought about the so called US democracy? One choice in the shape of two right wing parties both owned by lobby groups and corporations.

          • Matt

            Say like if GM were going down or Wall street banks, the US government would step in.

  • mk1313

    Time to get rid of the WTO. Globalisation has done more in the race to the bottom for economies than it has been a boon.

    • nakedChimp

      You’re barking up the wrong tree my friend. WTO and Globalisation aren’t the reason, they are just the buoys, you gotta dig way deeper than that.. Good luck.

      • mk1313

        The buoys are at the top of the tree so it’s the right tree. Yes, much else needs doing but you start somewhere and breaking corporations ability to take advantage of lax regulations or poverty wages elsewhere is a start.

        • Bob_Wallace

          There are a lot of major things which need to be done.

          Part of what needs to be done is to be patient while standards of living more or less equalize around the planet.

          Then there will be the (probably) never ending struggle to keep the most greedy from getting too large a share of the pie. That has become a major problem in the US now and is probably the largest problem we face as a nation.

          There’s probably no permanent fix. Nail some tin over one rat hole and the greedy rats will likely gnaw a new one somewhere else.

          • mk1313

            Yep, not a reason to ignore the current holes though.

  • DoRightThing

    Anything that encourages and accelerates the takeup of solar energy is good news.

    • John

      It doesn’t. It essentially kills the solar industry in the US.

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