Countering US trade protectionism

With the global focus on establishing a green and low carbon economy, each country bears the responsibility of reducing its carbon emissions. Upgrading domestic industries and adjusting the economic structure have become urgent tasks for both China and the US. Thus promoting their new energy industries is a necessary development choice for both countries.

The Barack Obama administration also regards the new energy industry as a channel to realize its National Export Initiative, which aims to double the US' export volume and create 2 million jobs within five years. But the US trade relief measures such as anti-dumping and anti-subsidy investigations will provoke trade friction with its main competitor in the new energy sector, which may eventually affect US jobs.

China's Ministry of Commerce has responded by urging the US to carefully handle the trade frictions between the two countries and called on the Obama administration to start dialogue and negotiations with China to properly solve the current dispute and terminate the investigation procedure. The US government should understand that in some industries, China and the US are closely interrelated and protectionism will harm both.

If the US uses the excuse of anti-dumping and anti-subsidy to impose high penalties on Chinese photovoltaic products, China's exports of these products will certainly be reduced. This will undermine the interests of US downstream enterprises, as Chinese enterprises will import less related raw materials and equipment from US producers. Meanwhile, China's major photovoltaic enterprises are all listed companies in the US, so the anti-dumping and anti-subsidy investigations are undermining the interests of US investors.

There is much room for cooperation between the US and China in new energy. The US should focus on the future development of the new energy sector and look to strengthen its cooperation with China to realize win-win results, rather than restricting competition and cooperation through frequent and short-sighted trade relief measures.

For now, China should pay close attention to how the investigations are progressing and try to estimate the effect they may have on its photovoltaic industry, and resolutely and reasonably use international trade regulations and mechanisms to safeguard China photovoltaic industry's legal rights.

Besides actively responding to the investigations, domestic enterprises should work together to collect conclusive evidence to counter the claims that China's photovoltaic products are sold below the fair value of the products in the US market and China's producers and exporters receive "improper" government subsidies.

China's new energy associations such as the China Renewable Energy Society and related enterprises should also actively work together to seek resolution to the dispute during the investigation process.

The author is a researcher with Chinese Academy of International Trade and Economic Cooperation.

(China Daily 02/26/2014 page8)