Trade and Competitiveness

Today I testified before the U.S.-China Economic and Security Review Commission during a hearing on China’s Global Quest for Resources and Implications for the United States. In my testimony, I described the prospects for shale gas in China and its implications for the United States.

As part of its green diplomacy strategy and move to promote a positive image in Durban, China for the first time highlighted its own development aid in the context of South-South capacity building and financial assistance with least-developed countries (LDCs) and small-island states (SIDs).

On December 5, Xie Zhenhua, NDRC Vice Minister and head of the Chinese delegation in Durban, announced four major areas of investment through South-South collaboration, including...

At the Asia Pacific Economic Cooperation summit in Hawaii last week, Chinese President Hu Jintao joined US President Obama and other APEC leaders in signing a pledge to cut tariffs on an undesignated list of environmental goods and services to 5 percent by 2015. APEC members also pledged to eliminate domestic content requirements on goods and services by 2012. Together, the 21 APEC economies account for 60 percent of global trade in environmental goods and services, and the global market for environmental technologies in 2008 represented $782 billion, with nearly $300 billion in the US, according to a US Commerce Department estimate. A spokesman for one organization representing US manufacturers hailed the commitment as a “huge” outcome. Read the full story at Reuters

China once again hosted its largest wind power expo, China Wind 2011, surpassing last year’s exhibition with the number of companies and the exhibition floor space increasing by 50%. Not surprisingly for an event in Beijing, the China market continued to be a major focus, but this year there was much more sense of a global market with increasing interest in new emerging markets, in particular Latin America.

In the wake of the Solyndra bankruptcy and amidst reports of an impending trade dispute against China’s solar subsidies, many are asking how US solar manufacturers can possibly compete with Chinese manufacturers. Sure, Chinese solar companies now dominate global solar photovoltaic (PV) markets (see figure below), but that does not mean the US is not still playing an important role in the solar industry. If we just look at how many solar panels are being manufactured here, we miss the more important metric—the total value created by the solar industry in the United States. A significant portion of the revenue from solar projects comes not from manufacturing the panels themselves, but site preparation and system installation, which must be done locally with local jobs.

In what appears to be a mutually-satisfactory outcome to a 9-month trade dispute resolution process initiated by the United Steelworkers (USW), China has agreed to end its “Special Fund for Wind Power Equipment Manufacturing” subsidy program that provided grants to domestic wind power producers favoring Chinese-made components over imports. In September 2010, the USW petitioned the U.S. Trade Representative to investigate several Chinese programs it said were against WTO rules. After reviewing the petition, in December the USTR requested formal dispute settlement consultations with the WTO concerning this wind subsidy program.

The latest meeting of the US –China Strategic and Economic Dialogue (S&ED) was held May 9 and 10 in Washington, DC and the two outcomes papers are out: The Strategic Track, which is essentially political, but also covers climate and energy, and the Economic Track, which is led by Treasury, but covers a number of trade and investment issues of interest to the energy industry.