China – US wind power stance all hot air

The Ministry of Commerce (MOFCOM) responded Thursday to US allegations of unfair subsidies for wind power equipment producers Thursday, saying on its official website that Chinese practices are in line with WTO rules.

"China’s measures to boost wind power development are effective in terms of energy savings and environmental protection, and thus important to realizing sustainable growth, which is in alignment with WTO rules," according to the MOFCOM statement.

The comments came in response to the Obama administration’s case against China filed with the World Trade Organization Wednesday. Siding with an American labor union and the United Steelworkers, the US government accused China of "illegally" subsidizing domestic wind power producers using parts made in China, the New York Times reported Wednesday citing Ron Kirk, the US trade representative.

"The government offers rewards to encourage advanced wind technologies with power generation capacity over 1 megawatt, but not for commercial technologies in general use", Zhou Fengqi, a researcher with Energy Research Institute, National Development and Reform Commission, told the Global Times.

"I don’t see any problem with that," he added that the US government also offers subsidies to encourage the research and development of the wind power technologies.

The US government so far this year has financed $1.47 billion to several wind power producers via the Department of Energy loan programs.

Chinese subsidies don’t impede the import or use of the parts produced by foreign wind producers, said Cao Yin, an energy analyst with Frost Sullivan, a global consulting firm.

"Currently domestic producers are either unable to produce or produce enough key wind turbines components," he explained.

Local producers therefore have to buy key parts produced by foreign counterparts or foreign producers with factories in China. Renowned manufacturers such as Vestas, Siemens and GE all have established local manufacturing facilities in China.

Cao said the US government has raised the case in an attempt to appease angry unemployed industry workers. The US unemployment rate edged up to 9.8 percent in November, up from 9.6 percent from the previous three months.

The Obama Administration is banking on clean technology development like wind power to generate more jobs. However, it faces increasing pressure as Europe has the technological advantage in this sector while China’s strength lies in its inexpensive labor pool, Cao said.