Frictions over Renewable Energy

A bright prospect?

In 2013 the International Solar Decathlon will be held in China's Shanxi Province, cosponsored by China's National Energy Administration and the US Department of Energy and undertaken by Peking University. China and the United States develop the new energy technology from the same starting point, recognizing the threat of energy shortage and its impact on economic development.

There is still big room for cooperation between China and the United States in the new energy industry. Currently China is the largest solar power equipment manufacturer, but most of the solar-grade polysilicon it uses now is imported from the United States. Chinese and US companies also cooperate in using wind power, hydroenergy and nuclear energy. Zhejiang Sanmen Nuclear Power Station, which is now under construction, uses third-generation nuclear energy technology of the United States' Westinghouse Co. and has imported other equipment from the United States. Since China and the United States are both major energy consumers, companies of both countries can play big roles in the two large markets.

Because the new energy industry has higher production costs than the fossil fuel industry, it can hardly survive in the market without subsidies and support from the government. The governments in Europe and Japan have both offered subsidies and granted support to their new energy industries. The US Government has given subsidies to many new energy industries, but, influenced by different interest groups, they are distributed unevenly.

In response to some US congressmen's criticisms of China's new energy subsidy policy, Li Chunding thinks that it is crucial for China to be granted market economy status. During the renewable energy trade frictions launched by the United States against China, anti-dumping is a major target, because anti-dumping duties are much higher. The US anti-dumping investigations are unreasonable and unfair for the United States having not granted China market economy status and still adopting the surrogate country approach.

"China should urge the United States to grant it market economy status and abolish the 'surrogate country' approach," Li said.

Li also said that in order to settle trade disputes it is crucial for China to strengthen the competitiveness of its renewable energy industry and accelerate its industrial upgrading. China's new energy products, once becoming competitive, will be sold in many countries, and by then, trade barriers will have little effect on Chinese exports, no matter which country has erected them.