Chinese firms say subsidies create unfair barriers for clean energy

BEIJING - China will probe US government support and subsidies for its renewable energy sector, following a recent move by the United States to investigate solar cells from China, the Ministry of Commerce said on Friday.

The probe was launched at the request of domestic industry associations, which argue that US subsidy and support policies created unreasonable barriers for the renewable energy industry in China, the ministry said in a statement.

These measures "violated the United States' commitments to the World Trade Organization rules and lowered the competitiveness of Chinese products in the US market", the statement said.

In October, several US-based solar cell companies filed a petition with the US Department of Commerce and the International Trade Commission, saying that Chinese companies sold solar panels below cost in the US market.

The statement by the Ministry of Commerce on Friday "will make the US clearer about the development of the photovoltaic industry in China", said Zhao Yuwen, director of the photovoltaic division of the China Renewable Energy Society.

"They should realize the industries of the two countries depend on each other and should stop doing things that are not good for both sides," Zhao said.

The ministry will investigate six projects in the US states of Washington, Massachusetts, Ohio, New Jersey and California, covering wind energy as well as solar and hydro technology products.

"China is very concerned about the anti-dumping, anti-subsidy investigation into Chinese photovoltaic solar cell producers, and it will hurt bilateral cooperation in the clean energy sector as well as the US solar industry," the Ministry of Commerce said in a statement after the US started the investigation in November.

People from the industry have said that both Chinese exporters and US solar firms risk losing business as a result of the US probe.

Although China's exports of solar products have been increasing, China is also buying more renewable energy products from the US, and cheap imports of photovoltaic products have forced many Chinese companies to go bankrupt, the China Photovoltaic Industry Alliance said earlier.

Many Chinese factories making polysilicon, a material used in solar panels, stopped or reduced production in the third quarter and more than 2,000 people in the industry lost their jobs in one province alone, according to the industry alliance.

"The investigation shows that the photovoltaic industry in China is making efforts for a fair market, and the US government should realize its own problems," said Li Lei, a lawyer on behalf of Chinese solar cell enterprises appealing to the US investigation with the law firm Sidley Austin.

The investigation from China will have an impact on the enterprises from the US, especially those which export photovoltaic equipment and materials to China such as Hemlock Semiconductor Group, according to Fang Peng, director of JA Solar Holdings Co Ltd, a solar cell maker based in China.

Sluggish economic growth in developed countries has led to rising trade protectionism, especially against China, the world's largest exporter. China has been hit by 602 trade remedy cases worth nearly $39 billion since its entry into the World Trade Organization a decade ago, according to the Ministry of Commerce.

While traditional manufacturing industries such as shoes and textiles used to be the main target of anti-dumping investigations, the latest trend is toward high-end products. In October 2010, the US announced it would investigate China's clean energy policy, claiming that the Chinese government had subsidized certain companies.