China Looks Into U.S. Energy Trade Policies

China’s ministry of commerce announced on Friday that it had opened an investigation into whether American subsidies and other policies in the solar, wind and hydroelectric sectors had unfairly hurt the industrial development of China’s renewable energy industries.

The announcement comes two weeks after the United States Department of Commerce said that it had accepted a request by SolarWorld Industries America and six other companies in the United States for an investigation into whether Chinese solar panel manufacturers had obtained export subsidies from the Chinese government, or had dumped solar panels in the United States for less than it cost to manufacture and distribute them.

The Chinese ministry said in a statement on its Web site that its investigation would end by May 25. That could allow the ministry to retaliate if the Commerce Department imposed punitive tariffs on shipments as part of either its antidumping investigation, for which a decision is due by mid-March, or as part of the antisubsidy investigation, for which a decision is due by mid-May.

The China Photovoltaic Industry Alliance, a government-controlled industry alliance, said on Monday that it was considering a request to the Chinese commerce ministry for an antidumping investigation into American shipments to China of polysilicon, the main ingredient needed to make conventional solar panels. But the commerce ministry announced on Friday that it had accepted a request for a far broader investigation from the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, as well as from the new energy chamber of the All-China Federation of Industry and Commerce.

American exports to China in the solar, wind and hydroelectric sectors are tiny. China set very high requirements for local content in solar panels or wind turbines but abandoned the standards in 2009, when the Obama administration pointed out that local content rules violated World Trade Organization rules. By that time, both sectors had grown strong.

American companies have also had limited success in exporting hydroelectric equipment to China. Almost all hydroelectric dams are built in China by state-controlled companies that have shown little interest in buying foreign wares.

W.T.O. rules are particularly stringent in banning export subsidies of the sort that China is alleged to have introduced to become the world’s dominant manufacturer of solar panels and wind turbines. But the W.T.O. also bans countries from setting domestic policies that discriminate against imports, although its rules set a high burden of proof that such policies have the effect of limiting imports.

SOURCE: http://www.nytimes.com/2011/11/26/business/energy-environment/china-looking-into-us-policies-in-renewable-energy-trade.html?_r=1&adxnnl=1&adxnnlx=1322917163-6InpplWErzpgB2h1+t3edQ