The growth of a domestic solar power industry in America is touted as a way to create a 21st century jobs-creating machine. But China sees the same potential and, has been accused of unfairly subsidizing its domestic solar industry and thereby pumping up its solar exports.
And while officials may call for action to change China”™s actions, according to a local authority on green business, there is little incentive under international law to do so.
Ironically, if the United States tries to retaliate through imposing trade sanctions on imported solar power materials, China would have a strong case to bring to international trade arbiters such as the World Trade Organization.
Whether action can be effective or not, officials in the Hudson Valley are urging President Obama to begin action to make solar panel competition fair. U.S. Rep. Maurice Hinchey, a primary supporter of The Solar Energy Consortium which has brought hundreds of solar energy jobs to the Hudson Valley, journeyed to Prism Solar Technologies in Highland Sept. 22 to highlight concerns that the Chinese are acting illegally under international trade laws.
“This (domestic solar) industry is set to take off and we can”™t allow all of our efforts to be hampered by Chinese subsidies,” Hinchey said. “The president needs to use his authority to hold them accountable.”
In a letter dated Sept. 22 to Obama, Hinchey cited a petition by the steelworker”™s union to the U.S. Trade Office urging action against China. He said the petition highlights “serious violations of international law and major obstacles to our domestic clean energy sector,” including illegally blocking foreign access to green energy materials of production, providing subsidies for Chinese exports while reducing clean energy import; and demanding foreign investors hand over trade secrets.
“Hinchey is right, anyone in the solar industry will tell you that,” said James M. Van Nostrand, executive director of the Pace Energy and Climate Center, who was recently in South Korea at a trade conference. “China has recognized there are strategic reasons to get ahead of the curve in terms of wind power and solar power and they are giving their industries a jumpstart in any way they possibly can. And they have crossed the line,” he said in terms of international trade law.
Hinchey”™s letter to the president makes no direct suggestion on how to rein in Chinese actions and Van Nostrand said that is because China has flouted the law in a way that can be observed but not easily stopped.
“There are some trade rules in the International Monetary Fund, but they don”™t have much leverage to actually punish violators,” Van Nostrand said. “And even when you find violations, as a practical matter nothing can be done.”
He said that is because domestic utilities and international investors alike are wary of challenging China”™s methods. Investors fear that if the U.S. successfully convinced the WTO that Chinese actions are such that tariff”™s are justified, China would retaliate against any joint ventures under way in China and block access to any new markets in the country.
Utilities, he said, are worried about U.S. challenges to China”™s policies because they say buying Chinese equipment for renewable energy is the cheapest way for American power suppliers to meet the growing requirement for a renewable energy component to their fuel mix.
