Solar power trade war heats up

Angela Merkel steps in to quell fears over EU China trade links.

The sun doesn’t always shine on EU China trade links- German Chancellor Angela Merkel has had to step in to quell fears of an impending trade war over the price of imported solar panels from China.

The European Commission is expected to decide by 5th June whether or not to impose an antidumping tariff of 47 per cent on the import of Chinese solar panels, after several European manufacturers have argued that China puts them at a disadvantage by unfairly subsiding its solar panel manufacturers.

With Chinese exports of solar panels worth 21bn euros a year, the stakes are extremely high and has forced Angela Merkel to step in to ensure the import tariff doesn’t spark a trade war. She and Chinese Premier Li Keqiang have begun talks during his first overseas tour to try and resolve the EU’s largest ever trade dispute.

“We should very intensely use the next six months, and Germany will do everything to ensure that the talks will really advance," explained Merkel, with Mr Li adding;

“(Import tariffs) will not only harm jobs in China, as well as development in the affected industries, but it will also affect development and endanger industry in Europe".

The Chinese solar power industry has grown vastly over the past five years, with the country’s solar panel manufacturers grabbing 80 per cent of the global market at the expense of US and European companies.

Analysts fear that such rapid expansion in the solar industry in China will lead to a period of rationalisation if foreign export markets dry up. The US already imposed import anti-subsidy duties of 4 per cent in March, followed by antidumping duties of 31 per cent in May.

This has pushed Suntech Power, China and the world’s largest producer of solar panels to the brink. Despite having sold more than 13m solar panels around the world, in March the company announced it had defaulted on a $541m bond payment, with the state having to step in to keep things afloat. LDK Solar has also ran into trouble, having to sell a 20 per cent stake to state-run Hen Rui Xin Energy.

The actions of the American Ministry of Commerce led to China hitting back by announcing antidumping and anti-subsidy investigations into imports of solar-grade polysilicon from the US. Many fear that if the European Commission decides to push ahead with its tariffs, China will similarly retaliate again, leading to much internal disagreement between EU members over the proposed tariffs.

An unnamed source told the AFP agency that 17 member states "have come out in opposition" of imposing Chinese solar tariffs, including the UK and Germany, while others such as Italy and France are in favour.

These latest developments closely mirror the situation in China’s wind energy industry, which has seen exponential growth over the past decade, but hides a number of deep-seated problems. After years of double-digit growth things are slowing down for Chinese wind manufacturers. In December, the US Commerce Department set import duties for Chinese wind towers at over 50 per cent, again depriving manufacturers of a key export market and throwing the industry into jeopardy.

The domestic wind market is incapable of supplying enough demand to meet the country’s massive manufacturing overcapacity. Despite impressive headline figures of 62.4 gigawatts of installed capacity by the end of 2011, China’s growth in wind power is somewhat misleading. Some 10bn kilowatt-hours of electricity produced by wind turbines in the country could not be accepted by the grid last year because of oversupply, plus a quarter of the installed capacity is not yet even grid connected, according to Greenpeace. As a result, industry analysts expect many of the smaller manufacturers not to survive as the industry tries to balance supply and demand, despite the government subsidies that have helped spur growth until now.

With similar accusations of heavy state subsidies ongoing in several other industry, most notably telecoms, the sun won’t set on this trade war for some time yet

A solar field in China. Photograph: Getty Images

Mark Brierley is a group editor at Global Trade Media

Photo: Getty
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If the left leaves it to David Cameron, we'll have Brexit for sure

Only an upbeat, leftwing case can keep Britain in the European Union.

After months flapping and hesitation, and with much of the reporting and detail so dull that it has barely penetrated the consciousness of even those who speak the language of ‘directives’ and treaty provisions, the EU referendum is upon us. With David Cameron signalling concrete outcomes for negotiations, we seem to be set for June, whatever the protests from opposition parties about the date being too close to local and national elections.  

Cameron’s deal, whose most substantive element consists of denying in-work benefits to European citizens, exemplifies the kind of debate that Conservative strategists want to create: a tedious, labyrinthine parochialism, blending the EU’s procedural dullness with an unquestioned mythology of the little Englander. Try actually reading the various letters, let alone the draft decisions, that Cameron extracted from Donald Tusk, and the agreement turns to putty in your head. But in summary, what Cameron is negotiating is designed to keep the EU debate as an in-house affair within the right, to continue and formalise the framing of the debate as between two strains of anti-migrant sentiment, both of them backed by big business.

The deal may be reactionary, but it is also mediocre in its scope and impact. The worries that many of us had in the leftwing pro-In camp, that Cameron’s deal would push back freedom of movement and working and environmental protections so far that we would be unable to mobilise for continued membership of the EU, can now be put to bed. Quite the opposite of allowing Cameron's narrative to demoralise us, the left must now seize an opportunity to put imagination and ideas back at the heart of the referendum debate.

The British political landscape in which that debate will play out is a deceptively volatile environment. Party allegiance is at a nearly all time low. Inequality is growing, and so is the gap between attitudes. The backbone of the UKIP vote – and much of the Out vote – will come from a demographic that, sometimes impoverished by the legacy of Thatcherite economic policy, sees itself as left behind by migration and change. On top of the class war, there is a kind of culture war underway in today’s Britain: on one side those who see LGBT rights, open borders and internationalism as the future; on the other side, those who are scared of the future. About the only thing these groups have in common with one another is their anti-establishment instincts, their total disdain and mistrust of politics as usual.

The only political movement to have broken through the fog of cynicism and disillusionment in British politics has come from the left. Jeremy Corbyn’s rise to the leadership of the Labour has unleashed something new - and while large parts of the press, and some Labour backbenchers, have portrayed this rise as a crusade of the “croissant eating” metropolitan elite, the reality is very different. The rise of the new Labour left has given voice to a renewed socialist and working class politics; its explicitly radical, outsider approach has given it traction across the social divides – among the young looking for a future, and among Labour’s old base. 

A politics of hope – however vague that term might sound – is the only real answer to the populist Euroscepticism that the Out campaign will seek to embody. Radical politics, that proposes an alternative narrative to the scapegoating of migrants, has to find voice in the course of this referendum campaign: put simply, we need to persuade a minimum wage worker that they have more in common with a fellow Polish migrant worker than they do with their employer; we need to persuade someone on a social housing waiting list should blame the privatisation of the housing market, not other homeless families. Fundamentally, the real debate to be had is about who the public blames for social injustice: that is a question which only the left can satisfactorily answer.

The outsider-led volatility of British politics gives the EU referendum a special kind of unpredictability. For voters who have lost faith in the political establishment – and who often have little materially to lose from Brexit – the opportunity to deliver a blow to David Cameron this summer will be tempting. The almost consciously boring, business-dominated Britain Stronger In Europe campaign makes a perfect target for disenfranchised public sentiment, its campaigning style less informed by a metropolitan elite than by the landed gentry. Its main weapons – fear, danger and uncertainty – will work on some parts of the electorate, but will backfire on others, much as the Better Together campaign did in the Scottish referendum.

Last night, Another Europe is Possible held a launch meeting of about a hundred people in central London - with the backing of dozens of MPs, campaigners and academics across the country. It will aim to provide a radical, left wing voice to keep Britain in the EU.

If Britain votes to leave the EU in June, it will give the Right a mandate for a renewed set of attacks on workers’ rights, environmental protections, migrants and freedom of movement. But without an injection of idealism and radicalism,  an In vote will be a mandate for the status quo - at home and in Brussels. In order to seize the real potential of the referendum, the left has to approach the campaign with big ideas and demands. And we have to mobilise.