China On Clean Tech Smart And Unfair At The Same Time

Dave Johnson

The rest of the world is realizing that extracting and burning fossil fuels as their main energy source is not a good, safe, sustainable and cost-effective approach, and is starting a transition to alternatives. This transition presents the biggest economic opportunity since possibly the industrial revolution itself, because in many ways it means rebuilding the entire industrial base from the ground up.

The rest of the world sees this and is fighting for pieces of that pie. The US doesn’t see it (or maybe better to say a well-funded smokescreen is keeping us from seeing it?) and as a result we are barely even on the playing field.

And, of course, of all the countries that are fighting for pieces of that pie, China is fighting in the ways the China is known for. They are being smart and are using every tactic in the book, including many that violate trade rules.

This morning’s Progressive Breakfast (click to subscribe) discusses the filing yesterday of a Steelworkers’ Union complaint that China is subsidizing its Green Tech industry in ways that violate trade rules. (Of course, this is on top of the Chinese currency manipulation that gives Chinese-made goods up to a 40% pricing advantage even before we consider other factors) WSJ: United Steelworkers allege illegal Chinese subsidies of clean-energy technology.

The union’s 5,800-page brief asks U.S. Trade Representative Ron Kirk to take action against China’s efforts to build its green-technology manufacturing, from compact fluorescent light bulbs to wind turbines. China has used “hundreds of billions of dollars in subsidies, performance requirements, preferential practices and other trade-illegal activities to advance its domination of the sector,” the USW said in a statement.

Washington Post, U.S. steelworkers target China,

In its complaint, the steel union claims that China flouts WTO rules by subsidizing companies that export solar panels, wind turbines and other “green energy” products, blocking imports of those goods from other countries, and restricting the sale of hard-to-obtain minerals that foreign energy companies need to compete.

Senator Sherrod Brown of Ohio backed up the Steelworkers’ points,

There is nothing normal or fair about the way China trades. If we are going to compete in the global clean energy manufacturing industry, we need strong trade enforcement. Every day we delay enforcing trade rules, China spends $51 million a day to speed past us in the race to lead the world in clean energy manufacturing, while elbowing competition out of the way through unfair subsidies and discriminatory tactics.

I applaud the United Steelworkers for filing this petition, and urge the Administration to work without delay alongside workers and businesses to challenge China’s trade practices at the WTO.

As I said, China is being smart and we are not. This week I attended the National Clean Energy Summit where one after another business leaders, investors and energy policy leaders explained that our country absolutely needs to implement a comprehensive energy policy that includes a price on carbon and a National Renewable Energy Standard, to trigger domestic demand for clean tech products, which will trigger investment and growth of an industry that we can take out to the rest of the world and compete in this arena. This is what the rest of the world is doing, and we are not.

Treehugger, in The Great Chinese Clean Energy Export Scandal says this points out,

… just how inadequate US energy policy has been in aiding the development of a clean energy sector. Yes, China appears to be clearly and openly violating WTO rules by doing things like allotting extra land and giving financial assistance to aid its clean energy companies.

Treehugger concludes, “the clear answer is instituting a strong clean energy policy of our own.

Again, Frank Sobatka describes one of the main reasons for the problem:

The result?

If we want to stabilize our economy and bring back good jobs our country must respond to China’s violations of trade rules. But we also must start being a lot smarter about fighting for pieces of the industries of the future. We need to get our comprehensive energy policy on line, with a price on carbon and a Renewable Energy Standard! We need to get online with a national economic/industrial policy and the apparatus to executive the strategies that get us there.

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