Is China To Blame For US Solar Industry Woes? New Report Analyzes US-China Solar Trade Case, What China’s Doing Right and Why Steep Tariffs Might Do More Harm than Good

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ChinaGlobalTrade.com US-China Solar Trade Case Report

The stakes are high. Punitive tariffs could dramatically affect the solar industry in the US and around the world. There are potentially severe unintended consequences of any policy action in this case – or inaction, for that matter.

Phoenix, Arizona (PRWEB) May 16, 2012

A new report published today by ChinaGlobalTrade.com, titled “China’s Solar Industry and the US Anti-Dumping/Anti-Subsidy Trade Case” analyzes the US-China solar trade case and explores the question: Is China to blame for US solar manufacturers’ woes?

The report presents 23 figures and 9 tables which – along with all of the content in the report as well as audio and video recordings – are free for journalists, bloggers, researchers, and others to use under the Creative Commons license. Also available online are a video interview with Gordon Brinser, President of SolarWorld Industries America, and an audio interview with Jigar Shah, President of the Coalition for Affordable Solar Energy.

U. S. solar manufacturing industry drops, China’s soars

The report notes that solar cell and module manufacturers in the US have had a tough few years. Between 2008 and 2011, the price of solar cells and modules plummeted 70 percent. Since 2010, twelve US solar manufacturing companies have had to lay off workers, shutter factories, or close down altogether.

At the same time, China’s solar manufacturers have grown incredibly. In 2001, China produced 1 percent of the world’s solar cells and modules. By 2010, China firms produced nearly half.

According to the report, China’s “meteoric” rise to the top does not necessarily mean that the Chinese government has been illegally subsidizing its solar manufacturers. Chinese manufacturers’ super-low prices don’t necessarily mean they’re dumping product below the cost of production.

Illegal subsidies and dumping are the central claims of SolarWorld and six other US-based solar manufacturers who petitioned the US Department of Commerce for relief from allegedly subsidized and dumped imports of Chinese-made solar cells and modules in the solar trade case.

Sorting out fact from fiction

The aim of the ChinaGlobalTrade.com report is to sort out facts and well-founded opinions from unfounded opinions and half truths, to discern the role that subsidies have played, and to explore the other factors that might give China’s producers a legitimate competitive advantage.

“The stakes are high,” said Molly Castelazo, Director of ChinaGlobalTrade.com. “For one thing, countervailing (anti-subsidy) duties, if high enough, could dramatically affect the solar industry in the US and around the world, as could anti-dumping tariffs. There are potentially severe unintended consequences of any policy action in this case – or inaction, for that matter.”

Highlights from the report include:

•     Of the top fifteen solar cell manufacturers in 2010, six were Chinese companies. Two were American. Of the fifteen solar module manufacturers in 2010, eight were Chinese. One was American.
•     Both China and the United States offer subsidies that both aim to nurture green energy technologies and to strengthen exports.
•     Estimates of the cost advantage of top tier Chinese cell and module manufacturers compared to their US counterparts range from about 18 percent to 30 percent. That cost advantage may be due to subsidies, but it’s also due to scale, vertical integration, discounted equipment and materials, and to a lesser extent, lower-cost labor.
•     The recent National Renewable Energy Laboratory (NREL) study on solar manufacturing costs has been grossly misrepresented; it does not conclude that Chinese solar manufacturers have a 5 percent cost disadvantage compared to US manufacturers.
•     If tariffs were high enough to force Chinese manufacturers to make their solar cells outside of China, it is not very likely they would make them in the US.
•     The United States is a net exporter of polysilicon and PV capital equipment. If in retaliation for punitive tariffs, Chinese manufacturers were to buy polysilicon and capital equipment elsewhere, that would mean a loss of almost $1.3 billion in annual export revenue.
•     Whatever the Department of Commerce rules on May 16, US solar manufacturers need more than just protection from Chinese imports in order to survive.

ChinaGlobalTrade.com is an initiative of The Kearny Alliance, a US nonprofit 501 (c) (3) foundation. The Kearny Alliance partners with other international organizations to further its mission of ‘Aid through Trade’, to advance international development and poverty alleviation through trade-related business, education, training and applied research.

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