The Chinese Ministry of Commerce (MOFCOM) published a statement yesterday, in what can only be assumed as retaliation, against the US’ preliminary determination in the antidumping duty investigation of imports of China-manufactured crystalline silicon PV cells. The US has imposed dumping margins ranging from 31.14% to 249.96%. PV Tech China reports that MOFCOM has identified six renewable energy initiatives in the US that the Chinese government believes is flouting World Trade Organization (WTO) rules on subsidies and countervailing measures in addition to the 1994 GATT Agreement.
MOFCOM’s preliminary investigation has found Washington and New Jersey’s renewable energy projects at fault, alongside Massachusetts’ solar rebate programme and California’s self-generating incentive projects.
Fighting fire with fire, four major Chinese solar companies have formed the Solar Energy Promotion Alliance (SEPA) to combat the US ruling. A member and one of the largest global producers of solar panels Suntech has stepped forward to comment.
Dr. Shi Zhengrong, CEO of Suntech, said, “Basically there is no dumping happening here. There’s no unfair subsidy from the government. So I think what the US DoC ruling is not factual.”
Shi also said it was particularly unfair that the US DoC used costs in Thailand as a proxy for costs in China in making its ruling, as the size and maturity of the solar industries in the two countries is vastly different. He said the reason Chinese products can be lower-priced has nothing to do with dumping. Furthermore, Shi noted that Suntech would include cells sourced from global suppliers for all future shipments to the US.
Shi said, “I think this is attributed to innovation. Innovation plays a very important role, and secondly is expansion, our investment to expand manufacturing capacity, thirdly is supply chain development.”
Shawn (Xiaohua) Qu, CEO and Chairman of Canadian Solar. China, said, “I think that will be very unfortunate, not only unfortunate to PV manufacturers in China, but also to many of our suppliers and partners in the US.”
Fortunately, there remain organizations calling for calm and asking for negotiations to be initiated against an escalating trade war. As a first step, SEIA and the China Renewable Energy Industries Association have requested that the U.S. and Chinese governments engage the 21 member countries of the Asia-Pacific Economic Cooperation (APEC) in a formal clean energy dialogue on trade.
Rhone Resch, president and CEO of SEIA, released the following statement: “The escalating trade conflict in the global solar industry will ultimately hurt the entire market at a time when solar energy is on the cusp of widespread adoption.
“While trade remedy proceedings, such as those being pursued by both the US and Chinese governments are legitimate, essential principles of a rules-based global trading system, so too are collaboration and negotiation.
“As stated previously, disputes within one segment of the industry affect the entire solar supply chain—and these broad implications must be recognized. Today’s decision by the Chinese government underscores this point. We, therefore repeat our call for the US and Chinese governments to immediately work together towards a mutually-satisfactory resolution of the growing trade conflict within the solar industry.”
Resch added: “The proverbial saying, ‘you can’t see the forest for the trees,’ rings true in this case. In the long run, continually escalating trade disputes in the solar industry will shut down markets around the world. Companies from all nations will be the ultimate losers. Exporters will find fewer and fewer destinations for their products. Large project developers and local installers will find it more and more difficult to source products and consumers will see solar energy as a less competitive source of electricity. This is an absolutely unacceptable outcome. A broader dialogue can only complement the legitimate avenues for trade remedies being pursued both here and abroad.”
Perhaps in response to SEIA and equivalent organizations, MOFCOM removed the previous battle-cry statement to replace it with one a little more subtle and seemingly conciliatory. It asks the US to “earnestly fulfill its commitments, change its discriminatory views toward China and attach great importance to key problems with fair treatment to China during its export control reform, which would be beneficial for expanding Sino-US bilateral trade and improving trade balances.”
The US International Trade Commission will make its final injury determination on or before November 19, 2012.