China Downplays Solar Dispute But Warns Against U.S. Protectionism

March 21, 2012
The United States said on March 20 that it will collect duties of between 2.9% and 4.7% on Chinese solar cells and panels. China had expected duties of up to 10%, state media said.

China on Wednesday sought to defuse a trade dispute with the United States after the latter imposed duties on Chinese solar products, saying it would not hurt ties, even as state media cried protectionism.

The United States on Tuesday said it will collect duties of between 2.9% and 4.7% on Chinese solar cells and panels, in a preliminary ruling after an investigation over whether companies received unfair financial support.

U.S. companies have accused China of improperly subsidizing its solar sector as part of a no-holds-barred commercial battle for supremacy of the lucrative market.

"It is normal for the two sides to have friction and differences of views," Chinese Foreign Ministry spokesman Hong Lei told a regular news briefing in Beijing.

"We should not allow such friction to impair the sound development of Sino-U.S. economic relations," he said, calling for negotiations to help resolve trade disputes.

China had expected duties of up to 10%, state media said. Shares of some Chinese solar companies rose in domestic trading Wednesday given the less-than-expected duties, brokers said.

A commentary issued by the official Xinhua news agency called the U.S. duties lighter than expected but it still warned Washington against resorting to protectionism.

"Although the solar-panel case has proven to be less devastating than expected, the U.S. government recently intensified shots against a range of Chinese imports ... recalling the phantom of protectionism," it said.

"Punitive duties, big or small, will distort normal trade relations and risk disturbing the fragile global economic recovery process."

Chinese producers denied the U.S. findings and accused Washington of erecting obstacles to trade.

Suntech (IW 1000/966), the world's largest solar-panel producer, said its success is based on "free and fair" competition.

"Unilateral trade barriers, large or small, will further delay our transition away from fossil fuels," Suntech Chief Commercial Officer Andrew Beebe said in a statement.

Another Chinese company, Yingli Solar, defended its business practices.

"We are not dumping, nor do we believe that we are unfairly subsidized," Robert Petrina, managing director of Yingli's U.S. subsidiary, said in a statement.

The U.S. Department of Commerce is due to announce more findings in May for a parallel investigation into whether Chinese makers are dumping -- or predatory pricing -- underpriced solar cells into the United States.

The U.S. moves come as Washington steps up efforts to protect domestic manufacturers from Chinese products that it also alleges benefit from an artificially undervalued currency.

Last month, President Obama took direct aim at China when he ordered the creation of the Interagency Trade Enforcement Center to expedite unfair trade complaints from U.S. business.

Copyright Agence France-Presse, 2012

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