Isra-Mart srl:US tries to trip China at starting line of green energy

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Isra-Mart srl news:

On October 15, the US announced an investigation into China's clean energy industry under Section 301 of the Trade Act of 1974, which empowers the US president to take measures against unfair or discriminatory trade practices by other countries.

But this time the investigation is not focused on traditional industries or a single product. It focuses on green technologies, including wind and solar products and high-performance batteries and efficient cars.

It is aimed at the future of an entire industry.

This move may have been prompted by the postponement of the report on China's exchange rate policy, or as a domestic sop for the mid-term elections. It could also be a way to put pressure on China and open the way for US firms to dominate China's highly competitive domestic market.

Challenging China's green development is a misplaced move. First of all, environmental technology should be encouraged worldwide to meet the global challenge of climate change.

China has made efforts to develop clean energy and reduce its carbon dioxide emissions. China has increased its use of hydro and nuclear power, as well as improving its wind power capacity from 2.59 million kilowatts in 2006 to 25.58 million kilowatts in 2009, a tenfold increase. This saves 16 million tons of coal a year. China produces 40 percent of the world' solar cells.

The US provides its own subsidies to its energy industry. Compared with the traditional fossil fuels such as coal and oil, clean energy is very limited, with higher early investment and prices, and needs help from the government in the initial stages.

The US provided $25.2 billion in subsidies to renewable energy last year, whereas in China, direct subsidies total less than 30 billion yuan ($4.5 billion), although there are also some supportive tax policies.

China will become the world's largest clean energy market. Over the past few years, US companies have obtained a substantial share in the Chinese wind power market.

In 2009, the US-based General Electric Company exported 340,000 kilowatts of wind power capacity to China, while exports of solar power equipment from the US are also mostly shipped to China. Attacking China's energy market will only damage US firms.

The differences between the energy consumption structure in China and the US are the main factors that are affecting the competition of US technologies in the Chinese market. Since the financial crisis, the US has been seeking cooperation with China over clean energy technologies, but US firms have not seriously studied China's energy structure and market.