U.S. begins probe of China subsidies to ‘green’ firms

U.S. begins probe of China subsidies to ‘green’ firms

The United States government has started to investigate if China is improperly subsidizing companies engaged in the alternative and renewable energy business, in what is a major blow to the alleged plan of China to wrest control of the promising industry.

A petition filed by the United Steelworkers Union accusing China of extending inappropriate subsidies to its home-grown ‘green’ firms in violation of WTO rules has been received by U.S. Trade Representative Ron Kirk.

“We take the USW’s claims very seriously, and we are vigorously investigating them,” Kirk said a statement. “Green technology will be an engine for the jobs of the future, and this administration is committed to ensuring a level playing field for American workers.”

The U.S. has three months to investigate the matter before it can forward the case through a formal complaint to the WTO.

High unemployment and a pressing need to increase U.S. exports have contributed to worsening trade relations with China which has a major trade surplus with the U.S.

China’s Communist Party Central Committee met on Friday to discuss its five-year plan for the economy.

The probe comes amid repeated calls from U.S. Treasury Secretary Tim Geithner for China to relax its tight grip on the yuan and his accusations that China is manipulating its currency to gain an unfair advantage in the global market.

The alternative energy industry has been touted by the Obama administration as an important growth engine for the U.S.

China is seen as taking steps to undermine that goal by subsidizing Chinese companies to dominate global market share of products such as solar panels.

Posted by James Fried on Saturday October 16 2010, 9:06 AM EDT. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0