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China Issues Latest Verbal Salvo in Solar Trade War with United States

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November 29, 2011

China Issues Latest Verbal Salvo in Solar Trade War with United States

By Cheryl Kaften
TMCnet Contributor

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The war of words—and competing commerce department investigations—continues to escalate between solar industry advocates in China and the United States.

The latest verbal barrage was launched on November 29 at a press conference in Beijing, at which the chairmen of China’s four largest solar companies—Suntech Power Holdings Co.;  Yingli Green Energy Holding Co.; Trina Solar Ltd.; and Canadian Solar Ltd. ,which has factories in China—stated that the U.S. anti-dumping and anti-subsidies investigation launched this month (and any restrictive punitive tariffs imposed as a result) would “unavoidably cause serious impairment to the sustainable development of the green energy industries as well as consumers' interests both in China and the United States."


In October, seven US solar cell companies—led by SolarWorld Industries America, a subsidiary of Bonn-based SolarWorld AG—filed a petition with the U.S. Department of Commerce (DOC) and the U.S. International Trade Commission (USITC), alleging that Chinese companies got illegal financial backing from their government and sold solar panels below-cost in the U.S. market. On November 9, the DOC held an initial hearing and then announced it was launching an investigation into the Chinese companies. A USITC panel will vote on whether there’s a case to continue with a probe later this week, on December 2.

In retaliation, last week, China's Commerce Ministry announced its own trade probe, into whether U.S. renewable energy subsidies represent an “unreasonable” trade barrier, in violation of World Trade Organization rules. Minister of Commerce Chen Deming commented, "Once there is any bad consequence from the investigation, we are ready to take measures."

At the Beijing press conference, the executives sharply criticized SolarWorld Industries America, alleging that it receives both U.S. and European subsidies while complaining about Chinese support, according to the Associated Press. "We applaud the support of the European Union and the U.S. government toward renewable energy. But we are very sorry that SolarWorld has applied such a double standard when they talk about subsidies," said Qu Xiaohua, chairman and CEO of Canadian Solar Ltd.

Frank Asbeck, CEO of SolarWorld AG retorted, “With massive pressure, China pursues an industrial policy strategy at the expense of the United States and Europe. These unfair practices must be stopped not only in the interest of the worldwide solar industry, but also for the benefit of the entire growth industry of environmental technologies.”

In addition, the executives warned in a prepared statement that Washington-imposed sanctions would lead to the loss of American jobs—because U.S. companies are both buyers of Chinese products and suppliers of materials. They said Chinese manufacturers spend some $2 billion a year to buy materials such as polysilicon from U.S. suppliers.

"The Ministry of Commerce's statement shows that the government knows better than before how to use the international trade tools under the World Trade Organization framework to protect the development of the domestic industries, pursuing a fair global market," said Li Lei, a lawyer with the New York City law firm Sidley Austin, who is representing the Chinese solar cell enterprises, adding,  "The quick action of the Chinese companies clearly shows that they know better how to protect their rights and benefits in the global market."

The trade complaint comes at a sensitive time for the two super powers, which are also at odds over ratification of the next version of the Kyoto Protocol, to be discussed at the United Nations Framework Convention on Climate Change (UNFCCC) in Durban, South Africa, this week through December 9. Neither nation will sign the accord without the commitment of the other. Many observers believe the participants are unlikely to agree on a second commitment period, and say that the most likely outcome of the Convention would be to lay a foundation for future progress.


Cheryl Kaften is an accomplished communicator who has written for consumer and corporate audiences. She has worked extensively for MasterCard (News - Alert) Worldwide, Philip Morris USA (Altria), and KPMG, and has consulted for Estee Lauder and the Philadelphia Inquirer Newspapers. To read more of her articles, please visit her columnist page.

Edited by Jamie Epstein

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