NY Times
BEIJING — China sharply rebuked the Obama Administration on Sunday for opening an inquiry into Beijing’s subsidies to clean-energy industries, charging that American own industrial subsidies far exceed China’s and warning bluntly that Washington “cannot win this trade fight.”
In an abruptly scheduled news briefing here, a senior Chinese economic official, Zhang Guobao, dismissed the Administration’s inquiry as election-season politics, and accused American trade officials of repeatedly delaying talks over the same issues that the White House now wants to probe.
“I have been thinking: what do the Americans want?” said Mr. Zhang, the vice chairman of the government’s National Development and Reform Commission. “Do they want fair trade? Or an earnest dialogue? Or transparent information? I don’t think they want any of this. I think more likely, the Americans just want votes.”
In an American election season defined by bleak economic and employment statistics, candidates in both parties have increasingly blamed Chinese trade tactics for slowing the United States’ recovery from the 2008 economic meltdown. The White House has ratcheted up criticism of China in recent weeks even as it dispatched senior officials to China to defuse trade tensions.
Mr. Zhang’s comments signaled that those tensions are continuing to rise, not only over trade issues but over longstanding claims that the Chinese artificially depress the value of their currency. He is widely seen in the West as China’s top energy policymaker because he also heads China’s National Energy Administration.
Mr. Zhang was reacting to an announcement on Friday that the United States Trade Representative’s office would investigate Chinese government support for companies that make wind turbines, solar-energy products, energy-efficient vehicles and advanced-technology batteries.
The United Steelworkers trade union filed a complaint on Sept. 9 accusing China of ignoring World Trade Organization rules that prohibit excessive subsidies of those markets. The trade representative’s inquiry, in reaction to the Steelworkers’ complaint, is potentially a first step toward filing formal charges against China in the World Trade Organization.
On Sunday, Mr. Zhang called the Steelworkers’ complaint unfounded, saying that American subsidies to clean-energy industries proposed by the Obama Administration total $60 billion, and the American government has slapped domestic-content provisions — so-called “Buy American” clauses — on certain clean-energy products.
In contrast, he said, “as far as I know, Chinese subsidies coming from all sectors, including taxes, are nominal,” and China is a major buyer of American clean-energy products. For example, he stated that while Chinese exports of wind turbines to the United States were small in 2009, Chinese manufacturers had imported key technologies and ingredients for those turbines from American manufacturers, from technologies to components to lubricants.
“What America is blaming us for is exactly what they do themselves,” Mr. Zhang said. “Chinese subsidies to new energy companies are much smaller than those of the U.S. government. If the U.S. government can subsidize companies, then why can’t we?”
Should American officials pursue the Steelworkers’ complaint, he added, “the only ones who will be humiliated are themselves.”
The Steelworkers’ complaint, however, echoes charges by other manufacturers outside China who argue that China gives hidden subsidies like free land and low-interest loans to its clean-energy industries, while dramatically restricting access to its domestic market by foreigners. They also accuse China of depressing its currency so exports of clean-energy products will sell cheaply abroad, while foreign imports will seem artificially expensive.
China said last summer that it would allow its currency, the renminbi, to appreciate. But its value has risen at a glacial pace, and only during intense pressure from its trading partners.
The United States’ economic stimulus legislation included a so-called “Buy American” provision requiring that recipients of stimulus money only purchase steel and other construction materials, like solar panels, that were manufactured in the United States or in other countries that have signed the W.T.O.’s side agreement requiring free trade in government procurement.
Virtually all industrialized countries have signed the government procurement agreement, which calls for signatories to open most government contracts to bids from other signatory countries. China promised to sign the side agreement “as soon as possible” when it joined the W.T.O. in 2001.
But municipal and provincial governments in China, particularly in inland provinces, have strongly opposed opening their procurement projects to international competition. So China has not yet signed the agreement, although some Chinese executives have begun advocating that it do so in the interests of helping Chinese companies export more goods to foreign governments.
The dispute over clean energy with the United States could also affect China’s relations with Japan. Since Sept. 21, Chinese customs officials have prevented the shipment of containers of rare earth minerals to Japan, and they have continued to block shipments through this weekend, although some smuggling has taken place, according to rare earth industry officials. A trickle of rare earths, needed for high-tech products from hybrid cars to mobile phones, is still reaching Japan because of smuggling.
The Japanese government has threatened to lodge a formal protest with China on Monday unless exports are allowed to resume. But even when exports resume, they may only last for another month or so, as the 32 authorized exporters of rare earths in China had used three-quarters of their export quotas for this year by the end of August.
In an abruptly scheduled news briefing here, a senior Chinese economic official, Zhang Guobao, dismissed the Administration’s inquiry as election-season politics, and accused American trade officials of repeatedly delaying talks over the same issues that the White House now wants to probe.
“I have been thinking: what do the Americans want?” said Mr. Zhang, the vice chairman of the government’s National Development and Reform Commission. “Do they want fair trade? Or an earnest dialogue? Or transparent information? I don’t think they want any of this. I think more likely, the Americans just want votes.”
In an American election season defined by bleak economic and employment statistics, candidates in both parties have increasingly blamed Chinese trade tactics for slowing the United States’ recovery from the 2008 economic meltdown. The White House has ratcheted up criticism of China in recent weeks even as it dispatched senior officials to China to defuse trade tensions.
Mr. Zhang’s comments signaled that those tensions are continuing to rise, not only over trade issues but over longstanding claims that the Chinese artificially depress the value of their currency. He is widely seen in the West as China’s top energy policymaker because he also heads China’s National Energy Administration.
Mr. Zhang was reacting to an announcement on Friday that the United States Trade Representative’s office would investigate Chinese government support for companies that make wind turbines, solar-energy products, energy-efficient vehicles and advanced-technology batteries.
The United Steelworkers trade union filed a complaint on Sept. 9 accusing China of ignoring World Trade Organization rules that prohibit excessive subsidies of those markets. The trade representative’s inquiry, in reaction to the Steelworkers’ complaint, is potentially a first step toward filing formal charges against China in the World Trade Organization.
On Sunday, Mr. Zhang called the Steelworkers’ complaint unfounded, saying that American subsidies to clean-energy industries proposed by the Obama Administration total $60 billion, and the American government has slapped domestic-content provisions — so-called “Buy American” clauses — on certain clean-energy products.
In contrast, he said, “as far as I know, Chinese subsidies coming from all sectors, including taxes, are nominal,” and China is a major buyer of American clean-energy products. For example, he stated that while Chinese exports of wind turbines to the United States were small in 2009, Chinese manufacturers had imported key technologies and ingredients for those turbines from American manufacturers, from technologies to components to lubricants.
“What America is blaming us for is exactly what they do themselves,” Mr. Zhang said. “Chinese subsidies to new energy companies are much smaller than those of the U.S. government. If the U.S. government can subsidize companies, then why can’t we?”
Should American officials pursue the Steelworkers’ complaint, he added, “the only ones who will be humiliated are themselves.”
The Steelworkers’ complaint, however, echoes charges by other manufacturers outside China who argue that China gives hidden subsidies like free land and low-interest loans to its clean-energy industries, while dramatically restricting access to its domestic market by foreigners. They also accuse China of depressing its currency so exports of clean-energy products will sell cheaply abroad, while foreign imports will seem artificially expensive.
China said last summer that it would allow its currency, the renminbi, to appreciate. But its value has risen at a glacial pace, and only during intense pressure from its trading partners.
The United States’ economic stimulus legislation included a so-called “Buy American” provision requiring that recipients of stimulus money only purchase steel and other construction materials, like solar panels, that were manufactured in the United States or in other countries that have signed the W.T.O.’s side agreement requiring free trade in government procurement.
Virtually all industrialized countries have signed the government procurement agreement, which calls for signatories to open most government contracts to bids from other signatory countries. China promised to sign the side agreement “as soon as possible” when it joined the W.T.O. in 2001.
But municipal and provincial governments in China, particularly in inland provinces, have strongly opposed opening their procurement projects to international competition. So China has not yet signed the agreement, although some Chinese executives have begun advocating that it do so in the interests of helping Chinese companies export more goods to foreign governments.
The dispute over clean energy with the United States could also affect China’s relations with Japan. Since Sept. 21, Chinese customs officials have prevented the shipment of containers of rare earth minerals to Japan, and they have continued to block shipments through this weekend, although some smuggling has taken place, according to rare earth industry officials. A trickle of rare earths, needed for high-tech products from hybrid cars to mobile phones, is still reaching Japan because of smuggling.
The Japanese government has threatened to lodge a formal protest with China on Monday unless exports are allowed to resume. But even when exports resume, they may only last for another month or so, as the 32 authorized exporters of rare earths in China had used three-quarters of their export quotas for this year by the end of August.
