China Digs into US Green Subsidies
Is China’s polysilicon investigation just a retaliatory move – or does it open a new issue?
China’s Ministry of Commerce (MOFCOM) last week announced the launch of antidumping and countervailing investigations into solar-grade polysilicon imports from the US. China will also be looking into charges that South Korea has been dumping the same commodity on its markets.
This may be China’s “back atcha” for the US decision to impose tariffs on Chinese solar modules (see No Winner in Chinese Solar Case). Blogger Scott Linicome offers an alternate view: This is not a retaliatory response to US trade dispute claims, but a concession by the MOFCOM to the Chinese polysilicon industry, which has been complaining about subsidized US imports.
Certainly, there’s been a sharp upswing in polysilicon imported from the US, which supplies almost 45% of Chinese imports (see below). The US government subsidies listed in the petition from the Chinese industry include US federal and state tax credits, exemptions and other incentives aimed at encouraging green industries. In May, MOFCOM reported that, based on a separate investigation, funding for renewable energy projects by certain states (including California, Massachusetts, New Jersey, Ohio and Washington) constituted prohibited trade subsidies. This investigation was also in response to domestic industry petitions. No AD/CVD penalties have been imposed as a result, yet. But these investigations into US green subsidies may signal a separate new policy initiative.
MOFCOM’s polysilicon investigation prompted Dow Corning to issue a statement expressing disappointment that the US and China have yet to resolve their solar trade disputes.
“This issue is serious and could impact Hemlock Semiconductor’s ability to sell material to China – its largest market – if the Chinese government assesses duties against US manufactured polysilicon sold into China,” says Robert D. Hansen, Dow Corning president and CEO.
Hemlock Semiconductor is a joint venture of Dow Corning, Shin-Etsu Hadotai and Mitsubishi Materials Corporation. The multinational pedigree makes Hansen’s point that the escalating US-China trade dispute is not only a no-win for both sides, but could cause collateral damage.
“In China, these actions threaten the Chinese solar industry’s access to the critical technical collaboration and material supply companies like Hemlock Semiconductor currently provide Chinese solar cell and module producers. This could lead to higher costs and potentially less globally competitive solar products from China. In the United States, more than $1 billion of US exports and potentially thousands of US jobs across the solar value chain are at risk – as is the steady growth of the US solar industry.”
Date posted: July 23, 2012