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China’s Zhang Says Obama Seeking ‘Votes’ With Clean Energy Case

Oct. 18 (Bloomberg) -- China’s top energy official said the U.S. was playing electoral politics with an announcement that it will investigate a union complaint that the Chinese government gives unfair subsidies to its alternative energy industry.

“Does America want to get fair trade or a genuine dialogue, or get transparent information?” National Energy Administration Director Zhang Guobao asked at a Beijing press conference last night. “I think not -- it seems America’s main reason is to get votes.”

The U.S. acted on a complaint from the United Steelworkers union that China’s aid to its clean-energy producers violates global trade rules. Accepting the petition may lead the U.S. to file a protest at the World Trade Organization. The complaint, called a Section 301 filing, is the first filed and accepted by President Barack Obama’s administration after his predecessor, George W. Bush, turned down trade complaints against China.

Obama and the Democratic-controlled Congress are under increasing pressure ahead of the Nov. 2 congressional elections to take measures to reduce China’s trade surplus. The trade gap widened to a record $28 billion in August, bolstering claims that a weak Chinese currency is hurting American jobs. Last week Montana Democrat Max Baucus, chairman of the Senate Finance Committee, said a bill targeting China’s yuan may pass the Senate later this year and be sent to Obama for his signature.

Counter Charges

Zhang, who is also vice chairman of the National Development and Reform Commission, China’s main economic planning body, said the Obama administration was subsidizing domestic companies as part of the U.S. economic stimulus program.

“Why are the U.S. subsidies legal, and the Chinese ones wrong?” Zhang told reporters, according to a Chinese transcript of the press conference. The U.S. “cannot win this trade fight.”

The Chinese government said in July that the country may spend about 5 trillion yuan ($738 billion) in the next decade developing cleaner sources of energy to reduce emissions from burning oil and coal. Obama is aiming to create 800,000 new jobs in alternative energy by 2012 through subsidized loans, grants and tax incentives.

Lawmakers have decried proposals to involve foreign companies in U.S. clean energy projects. Shenyang-based A-Power Energy Generation Systems Ltd. announced plans earlier this year to build a wind turbine factory in Nevada after Senator Charles Schumer, a New York Democrat, led an effort to block $450 million in stimulus funds for a Texas wind farm that planned to use turbines made in the company’s Chinese facilities.

Curbing Pollution

China, the world’s biggest energy user and largest emitter of greenhouse gases, wants to curb its pollution amid increasing environmental degradation by boosting solar and wind power and increasing penalties on heavy polluters.

China Development Bank, a state-owned lender, this year agreed to more than $42 billion of loans to Chinese solar-panel and wind-turbine makers. Yingli Green Energy Holding Co., China’s second largest maker of solar panels by market capitalization, in July secured a $5.3 billion loan from the bank. The loan from China Development Bank has “no discount” and is “competitive,” Miao Qing, Yingli’s Investor Relations director, said today in a telephone interview.

The Baoding, Hebei-based company, which aims to get 15 percent of its sales from the U.S. market in the second half, was awarded $4.5 million in tax credits for a 100-megawatt solar module production plant by the U.S. Treasury Department in January, said Miao.

China’s Commerce Ministry said Oct. 16 that the U.S. complaint was “groundless” and “irresponsible.”

To contact Bloomberg News staff on this story: Feifei Shen in Beijing at Fshen11@bloomberg.net; Michael Forsythe in Beijing mforsythe@bloomberg.net.

To contact the editor responsible for this story: Bill Austin at billaustin@bloomberg.net; Reed Landberg at landberg@bloomberg.net.

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