Isra-Mart srl:American Green Energy Probe Just a Vote Grab, China Says

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Beijing. A United States probe into alleged Chinese subsidies to clean energy companies was driven by a quest for votes in next month’s US elections, the Communist Party’s mouthpiece said on Wednesday.

US authorities said last week they would investigate whether China funneled huge subsidies to its green energy sector in a bid to dominate the burgeoning market, opening a new front in a wide-ranging trade tussle between the two.

The decision was announced on the same day that the Treasury Department again delayed publishing a report that could have labeled China a currency manipulator, and thereby opened the path for US sanctions on Chinese goods.

The head of China’s National Energy Administration, Zhang Guobao, accused US politicians of using the probe to curry favor with voters ahead of the Nov. 2 midterm elections, and the People’s Daily followed suit.

The newspaper said the issue, like the Chinese-US dispute over the value of the yuan, had been “deliberately hyped up by US interest groups and their political proxies”.

“What they are most concerned about is to earn more votes at the midterm elections,” the paper said.

The US investigation was sparked after the United Steelworkers union — one of the nation’s largest — petitioned trade officials to probe Chinese practices it says contravene World Trade Organization rules.

The New York Times then reported that in retaliation for the probe, Beijing had halted shipments to US companies of rare earths, vital for the production of everything from solar-powered batteries to hybrid cars.

The People’s Daily said the WTO should investigate the hundreds of billions of dollars the US was pouring into its own green sector. “Compared with the United States, China’s subsidies of this kind are so tiny,” it said.

“The United States’ so-called investigation will not stand up if all the facts are presented to the world.”

Meanwhile, China’s Commerce Ministry said it would limit exports of rare earths to protect its environment but denied shipments would be cut by up to 30 percent next year.

“The report is completely false,” the ministry said.

“China will continue to supply rare earths to the world, and at the same time, to protect usable resources and sustainable development, China will also continue to impose restrictive measures on exploration, production and import and export of rare earths.”

Beijing said last year it would cut rare earths exports to conserve supplies and curb environmental damage from mining.

Those plans are being closely watched by industrial customers in Japan, the United States and Europe that need them to produce mobile phones, batteries and other products.

The Commerce Ministry statement gave no details of next year’s planned export quota but said curbs were in line with World Trade Organization principles.

China has about 30 percent of global rare earths deposits but accounts for about 97 percent of production.

The United States, Canada and Australia have rare earths but stopped mining them in the 1990s as lower-cost Chinese supplies became available.