October 21, 2010
At the request of the United Steelworkers Union, the Office of United States Trade Representative announced recently it would launch a Section 301 investigation against Chinese policies and measures in the field of clean energy.
In its September application, the United Steelworkers criticized the Chinese government for threatening employment opportunities and the international competitiveness of the U.S. new-energy sector with measures such as control on key raw materials, government subsidies, discriminatory law as well as technology transfer, which created favorable policies worth of millions of U.S. dollars for Chinese enterprises.
China’s Ministry of Commerce responded to the investigation, calling the charges groundless and saying the United States is irresponsible for launching such an investigation. The ministry said China’s policies and measures on clean energy are fully consistent with WTO rules. The 301 investigation set a bad example of trade protectionism to the rest of the world, and China will safeguard its legal rights according to WTO rules.
An analysis on the situation can reveal that the U.S. charges are nothing but self-protection. The so-called control on key raw materials refers to the export restriction of rare earth minerals. As a matter of fact, China exported rare earth materials at a very low price over a long time, and it is justifiable for China to make some changes to its rare earth export policy as a measure to ensure its sustainable development. Furthermore, rare earth minerals are not the only materials that support the development of the new-energy industry.
The charge of discrimination against foreign enterprises also does not tally with the fact. The reason why foreign companies have lost the bids is because their asking price is much higher than Chinese enterprises. Foreign companies like to directly find the buyers rather than through bidding.
Furthermore, the United States is guiltier of "large government subsidies" to their own sector. According to the American Recovery and Reinvestment Act of 2009, the U.S. renewable energy industry alone has received a massive subsidy of 25.5 billion US dollars. The Chinese government’s subsidy to domestic renewable energy is nothing compared to that of the United States.
On the eve of the U.S. mid-term election, United Steelworkers, one of the most active workers’ organizations, carries a major influence on elections and decision-making. Analysts have said that the White House directed the charges at China by commencing an investigation to divert attention and gain more votes.
From a long-term standpoint, charges by the United States in the field of clean energy hint at the ongoing global war on new energy strategy…