A US probe into claims China illegally subsidizes its green-energy sector will backfire as Washington will be forced to reveal its own support for US firms, a senior Chinese official warned.
The US alleges that China funnels huge subsidies to its green technology sector in a bid to dominate the fast-growing market, opening a new front in a wide-ranging tussle over trade between the two giant economies.
In the strongest response from Beijing since US authorities announced their investigation on Friday, National Energy Bureau head Zhang Guobao (張國寶) -accused Washington of plowing billions into its green-energy sector.
“Chinese subsidies to new energies companies are very small,” Zhang said in a statement reported by state media yesterday.
“But the United States had subsidized the new energy enterprises with US$4.6 billion in cash in the first nine months of 2010, including US$3 billion to wind power enterprises,” he said.
The statement said the US subsidizes up to 2,300 energy-related programs, including clean-energy projects.
Zhang said that the US probe was called to play to a -domestic audience as the US heads to the polls next month for midterm elections.
“I was very much astonished at it, wondering what the United States wants. Do they want fair trade, a normal dialogue or transparent information?” he said.
“Judging from the procedures, I believe [politicians of] the United States are more willing to get votes,” Zhang said.
The investigation was sparked after the United Steelworkers union — one of the nation’s largest — petitioned trade officials to probe Chinese practices it claims contravene WTO rules.
It also accused China of providing more than US$216 billion worth of subsidies to green technology makers — more than twice as much as the US spent on the sector and nearly half of the total ‘green stimulus spent worldwide, according to the union.
The claims have received strong backing from members of Congress including House speaker Nancy Pelosi.
“While both China and the US must continue to work toward a clean energy future, it is long past due for the Chinese government to play by the rules,” she said last week.
Figures released on Thursday fueled US concerns about the trade imbalances with China. The Commerce Department reported the US trade deficit with China ballooned to a new record in August.
The politically sensitive gap with China expanded eight percent, to US$28 billion, surpassing the previous record of US$27.9 billion in October 2008.
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