China ends wind power subsidies after U.S. complaint
June 23, 2011 Category Alternative energy, Environment
China has agreed to halt subsidies to wind power manufacturers that violate World Trade Organization (WTO) rules, according to U.S. Trade Representative Ron Kirk. The move comes after the the United Steelworkers Union filed a complaint to the WTO. The Chinese currently subsidize wind-power firms that use domestic parts instead of imports, giving them an unfair advantage over U.S. wind turbine makers, according to the U.S. “We challenged these subsidies so that American manufacturers can produce wind turbine components here in the United States and sell them in China,” said Kirk. He also criticized China for not providing regular information to the WTO about its subsidy programs. While the decision is being hailed as a victory for the U.S., analysts say it is unlikely the move will slow down the development of China’s renewable energy sector. “Chinese wind power companies have reached a stage that, regardless of subsidies, they will head out and aim for overseas markets if there are opportunities,” said Dennis Lam of DBS Vickers. China’s biggest wind turbine makers, Sinovel Wind Group and Xinjian Goldwind Science and Technology, have already announced overseas expansion plans. China’s wind energy industry does not expect a major impact of the termination of governmental subsidies, as it is now strong enough to compete with international players, according to Shi Pengfei, Vice President of the China Wind Energy Association. Companies that use domestic components instead of imports under its “indigenous innovation” program will no longer receive subsidies ranging from USD6 million to USD22 million. China has more than 80 wind turbine makers and is considered the biggest competitor of the U.S. in energy innovation.
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