China solar executives aim to avoid trade war with U.S.

Reuters News
Posted: Nov 29, 2011 4:29 AM
China solar executives aim to avoid trade war with U.S.

By Michael Martina

BEIJING (Reuters) - Heads of China's solar industry on Tuesday said they strongly oppose an investigation by the U.S. into Chinese-made solar panels and asserted that competitive advantages alone explain their success on the global market.

However, in a statement from the China Chamber of Commerce for the Import and Export of Machinery and Electronic Products (CCCME), which represents the solar industry, they added that the firms did not intend to start a trade war with the U.S. industry.

"China-based PV (photovoltaic) industries express their strong opposition to the petition for the investigations ... and that any trade restrictive measures that may be imposed will unavoidably cause serious impairment to the sustainable development of the green industries as well as consumers interests in both China and the U.S."

Earlier this month, the U.S. Commerce Department agreed to look into a complaint by Solarworld Industries Americas Inc, the U.S. arm of Germany-based SolarWorld AG, petitioning the government to slap duties on Chinese solar cells and modules.

In response, China on Friday announced an investigation into U.S. government policy and subsidy support for renewable energy, including solar equipment.

"Chinese companies hereby avow that their fight in the investigations is directed against a few petitioners led by SolarWorld only, not the entire U.S. PV industry. Chinese PV companies have no intention to initiate a trade war in China against the U.S. PV industry," the Chinese statement said.

The tit-for-tat investigations underscore simmering trade tensions between the two countries, as leaders warn of a rising tide of protectionism amid gloomy global economic forecasts.

Chinese solar firms said that their success was due to "competitive advantages" and the global industry should welcome their efforts to cut production costs, amid growing tensions with the United States over trade in renewable energy equipment.

The Chinese association's statement defended the government support given to Chinese PV industries, saying it is "a much smaller amount" compared with what the United States and the European Union give to their companies.

China's solar industry association, China Photovoltaic Industry Alliance, earlier had said that Chinese solar companies may ask Beijing to launch an anti-dumping and subsidy probe into imports of U.S. polysilicon, the raw material used to make solar cells.

The alliance said the U.S. polysilicon companies were enjoying "substantial economic benefits" and receiving "hundreds of millions of dollars in government subsidies," on top of perks such as cheap electricity.

While the U.S. probe threatens to deprive Chinese rivals of a large chunk of the solar market, analysts say U.S. solar firms also risk losing some of the business too if the dispute escalates into a major rift.

The U.S. International Trade Commission, which has the final say on whether any duties are imposed against China in the case, will examine the issue and vote December 5 on whether there is enough evidence of injury to U.S. companies for the case to proceed. In the event, the Commerce Department would then make its preliminary decisions on duties in January and March.

(Reporting by Michael Martina; Editing by Ken Wills)