Chinese Government `Confused' by U.S. Probe

The Chinese government is facing contradictory criticism from the U.S. and a UN green investment program over subsidies to its clean-energy industry, a Chinese industry group said.

The U.S. government probe into a union complaint that China is unfairly subsidizing its clean-energy companies contrasts with allegations that Beijing is providing less support than it could to its wind generators, Li Junfeng, secretary general of the Chinese Renewable Energy Industries Association, said in an interview today.

“The Chinese government is confused,” he said in Noida, outside the Indian capital of New Delhi. “They don’t know what to do.”

The Obama administration is investigating a complaint from the United Steelworkers union that alleges China is doing too much to help its companies expand clean-energy sales, a violation of global trade rules.

Li said that contradicts criticism that China lowered its wind subsidies to allow the sector to attract more investment from the UN Clean Development Mechanism, a program that awards tradable credits to projects in developing countries that help reduce emissions.

“The Clean Development Mechanism’s executive board says China gives too little support to renewable, so that’s why all projects are happening in China,” Li said. “Then the U.S. says you have too much subsidies.”

Accepting the steelworkers’ petition may lead President Barack Obama’s administration to file a protest at the World Trade Organization over subsidies that the union says are contrary to trade rules.

‘Ridiculous Situation’

“It’s a very ridiculous situation,” said Huang Ming, president of Himin Solar Energy Group, a maker of solar panels, water heaters and lights. The clean-energy industry is too small to be causing a barrier to business at this stage for the steel industry, he said.

China Development Bank, a state-owned lender, this year agreed to more than $42 billion of loans to Chinese solar-panel and wind-turbine makers. China’s Commerce Ministry on Oct. 16 called the U.S. complaint “groundless” and “irresponsible.”

http://www.bloomberg.com/news/2010-10-27/chinese-government-confused-by-u-s-probe-of-green-aid-trade-group-says.html