By ELAINE KURTENBACH
AP Business Writer
SHANGHAI (AP) — China is defending its subsidies for wind and solar power
against a U.S. complaint to the World Trade Organization that such support
is unfair, saying its policies are best for fighting climate change.
The relatively mild response by China’s Commerce Ministry on Thursday to the
U.S. move likely reflects Beijing’s desire to keep relations on a positive
track in the weeks leading up to Chinese President Hu Jintao’s state visit
to the U.S., which begins Jan. 19.
“Every country in the world is seeking to develop renewable energy to cope
with climate change. China’s wind power measures are helping save energy and
protect the environment,” the Commerce Ministry said in a statement.
“This is crucial for sustainable development and is in accord with WTO
principles,” it said.
The ministry said China attaches “great importance” to WTO dispute
settlement procedures and would reserve its “due rights.”
News of the case filed against China at the Geneva-based WTO on Wednesday
was awkwardly timed, coming on the same day of the White House’s
announcement of Hu’s visit.
But analysts said despite its recent shows of assertiveness over various
issues, Beijing would likely downplay the dispute, which will take months to
“I don’t see it causing any negative impact on President Hu’s visit,” said
Zhu Feng, a professor specializing in China-U.S. relations at the School of
International Studies at Peking University.
“In fact, the state visit will serve as a great channel for the Chinese and
U.S. leaders to discuss their political and economic interests, including
such disputes,” Zhu said.
The two countries are at odds over a slew of trade and diplomatic issues.
Beijing was outraged earlier this year by a major U.S. arms sale to Taiwan,
while Washington has been upfront about its desire to see Beijing do more to
rein its longtime ally North Korea.
The U.S. side has persisted, meanwhile, in pushing for faster changes in
currency policies that it contends keeps the Chinese yuan undervalued,
swelling the chronic U.S. trade deficit with China.
On Thursday, adding to the wide range of products under dispute, the
Commerce Ministry announced it was launching an anti-dumping probe of
photographic paper imported from the U.S., the European Union and Japan. The
investigation was in response to an industry complaint received on Nov. 8,
Despite those differences, in trade talks last week, the two sides agreed on
pledges for improved protection of patents and other intellectual property,
reforms of technology innovation policies, and increased access for U.S.
beef and poultry exports to China.
China also pledged to remove requirements that Washington says discriminate
against U.S. firms competing to build large wind power plants.
Beijing has invested heavily in nurturing its renewable energy sector,
building wind farms and subsidizing electricity sold by wind power
generators. It recently announced new subsidies for the solar power
The government wants at least 15 percent of China’s power to come from
renewable energy by 2020, viewing such commitments as a way to reduce
greenhouse gas emissions and limit the country’s dependence on costly
imports of oil and gas.
The WTO case was in response to a United Steelworkers petition last
September that alleged Chinese companies can sell wind and solar equipment
on international markets at cheaper prices than their competitors because
they receive subsidies.
The administration’s WTO case alleges that those subsidies violate global
trade rules. Such subsidies, said U.S. Trade Representative Ron Kirk, are
“particularly harmful and inherently trade distorting.”
The case will first trigger consultations between the two nations. If they
fail to resolve the dispute, the WTO will convene a hearing panel.
If the administration wins the case and China does not give up its
subsidies, the United States would be authorized to impose penalty tariffs
on Chinese products equal to the lost sales that U.S. energy companies are