China Pushes Back at US Solar Complaint as Trade Dispute Heats Up

The Chinese government has today given short shrift to proposals from a group of U.S. solar firms for new import duties on low-cost Chinese solar panels, which they allege have benefited from "illegal" subsidies.

In a widely expected move, the Chinese government issued a statement on the website of the country's Commerce Ministry, criticising the complaint and warning the U.S. not to introduce new duties.

"If the U.S. government files a case, adopts duties and sends an inappropriate protectionist signal, it would cast a shadow over world economic recovery," the statement read.

"The Chinese government hopes the U.S. will scrupulously abide by its promise to oppose trade protectionism, avoid adopting protectionist measures on Chinese solar cell products, jointly protect a free, open and fair international trade environment, and adopt a more rational means of handling trade frictions."

In an indication that any attempt by the U.S. to block imports of Chinese solar panels could spark a trade war, the statement also noted the U.S. has put in place its own subsidies and support mechanisms to accelerate the development of its domestic solar industry.

Launching their official complaint earlier this week, the coalition of seven U.S. solar firms acknowledged that support mechanisms were in place in the U.S., but argued they were in line with the World Trade Organisation.

In contrast, they allege the scale and scope of Chinese subsidies constitutes a breach of international competition rules.

The group claimed imports of heavily subsidised Chinese solar panels has driven down the cost of the technology, forcing the closure of seven U.S. solar factories in the past 18 months.

The U.S. government will have to decide whether to pursue the complaint and impose import duties of more than 100 percent on Chinese imports.

The spat is the latest in a series of trade clashes between the U.S. and China, several of which have centred on clean technologies.

Last year, the U.S. successfully pursued a case against Chinese subsidies for wind turbine manufacturers, while clean-tech firms in both the U.S. and E.U. have long-complained that Chinese firms are benefiting from generous levels of government support.

This article originally appeared on BusinessGreen.

Solar panel photo CC-licensed by Andreas Demmelbauer.