Global economic woes mire China in trade rows

In May, in a preliminary ruling, the US Department of Commerce imposed anti-dumping tariffs equal to between 31.14 percent and 249.96 percent of the cost of solar panels imported from China. Two months before, it had imposed countervailing duties - also known as anti-subsidy duties - equal to between 2.9 percent to 4.73 percent of the cost of Chinese panels.

Then in July, the US announced it would set tariffs equal to as much as 73 percent of the cost of wind towers imported from China, contending that the country has sold the towers for less than how much it costs to produce them.

Following the US' example, the EU has submitted an anti-dumping complaint against Chinese companies.

"Industries, such as auto parts, solar energy and wind energy, are at the most risk in China of being targeted by US anti-dumping and anti-subsidy investigations," Yu said.

The trade investigations threaten to harm all of the parties that are involved in them. The EU, for instance, was the destination in 2011 of 60 percent, or $35.8 billion worth, of China's solar exports.

Trade disputes also tend to harm companies that have relationships with the companies that are directly involved and lead to job losses.

"The prevalence of trade protectionism directly reflects the state of the global economy," Tu said. "We noticed the current wave of trade investigations targeting China early in the second half of 2011, when Europe's debt troubles began to spread."

Hitting back

Faced with an increasing number of trade disputes, the Chinese government is hitting back. Two months after the US announced a preliminary ruling in the case concerning exports of Chinese solar panels, China said it was starting an investigation into US polysilicon.

The Chinese government has also said it is looking into industrial associations' requests for investigations into whether European wine makers and polysilicon exporters have benefited from unfair subsidies and have dumped their products on the Chinese market.

"The US and EU have acted irresponsibly in deciding to open probes into certain Chinese exports, such as solar products," Tu said. "China could consider taking countermeasures. The country is on the right track."

On Monday, China proposed holding a dispute settlement consultation that would give it an opportunity to talk to the US about Congress' adoption in March of a law that retroactively gave the US Commerce Department power to impose anti-dumping duties on Chinese goods.

But, "we don't recommend that the Chinese government abuse its ability to retaliate," Tu said.

Tu said China should encourage companies to cooperate with developed economies and enter more markets.

"The EU is in a leading position in equipment manufacturing, and the US is a leading technology researcher and a producer of lots of raw materials," Tu said. "But China is an important base for processing raw materials."

Chinese companies have been looking for new sources of revenue. For instance, Sky Solar Holdings Co, a Chinese solar power developer, has said it plans to invest about 12 billion yen ($154 million) to build 20 solar power stations in Japan.

Premier Wen Jiabao has said the country will take steps to encourage domestic companies to innovate more and become stronger competitors.

Contact the writers at dingqingfen@chinadaily.com.cn and lijiabao@chinadaily.com.cn

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