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Solar businesses consider US countervailing duties

03-14-2012 14:08 BJT

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Next Monday, the U.S. Department of Commerce is set to rule on levying countervailing duties against Chinese solar-panel manufacturers. Ahead of that decision, many Chinese companies say they're being treated unfairly and are considering putting off exports to the U.S.

Alex Solar is a manufacturing company in Shanghai that specializes in solar cells, and 98% of their revenue comes from international exports. The company had been preparing to enter the US market this year. But news about possible countervailing duties in the US has led the company to reconsider its plans.

Malcolm Ko CFO of Alex Solar said: "We are now doubting to enter the market, because of the anti-vailing laws. Initially we were going to enter the US market on a large scale this year."

There are international trade laws to keep trading fair. The anti-dumping laws are there to keep local companies afloat when international imports exhibit a cheaper alternative. The US is now considering additional countervailing duties on some Chinese products, however.

Dr. Wang Zhongmei, associate research professor of Institute of World Economy said: "The anti-dumping laws are meant to help the domestic market by adjusting nonmarket economy prices when importing into the US market. The anti-dumping law is meant to have already adjusted the prices to accurate value according to 3rd world market prices. Thus, if the countervailing laws are implemented, that would mean the imports will be taxed twice just to make the market fair."

Countervailing laws are imposed on imports that seem to receive an unfair advantage in subsidies from their government.

Dr. Wang said: "Under WTO regulations, there are subsidies that are allowed and some that are not. When subsidies that include loans, rent, or ones that help rural areas and ones that are provided to all companies within the industry, they are allowed. However when it gives domestic producers an unfair advantage that directly influences output, they are illegal."

Companies such as Alex solar who only receive allowed subsidies such as R&D and tax refunds from the Chinese government are now contemplating whether entering the US market is a beneficial move or not. China has appealed several such cases to the WTO.

 

Editor:Zhang Rui |Source: CNTV.CN

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