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The U.S. Election Season Frustrates China

On October 17, Zhang Guobao, the head of China’s National Energy Administration, held an abrupt news briefing and sharply criticized the Obama administration for playing election season politics. “Do they want fair trade? Or an earnest dialogue? Or transparent information? I don’t think they want any of this. I think more likely, the Americans just want votes.”

This comes in response to the increased criticism of U.S. towards China in recent weeks, particularly with the trade tensions between the two country. On October 15, the U.S. Trade Representative’s office announced that they would investigate Chinese government support for manufactureres of wind turbines, solar energy products, energy-efficient vehicles and technologically advanced batteries. The investigation is potentially a first step toward filing formal charges against China with the W.T.O.

Mr. Zhang said such inquiry is unfounded and argued that the Obama administration itself has subsidies totaling $60 billion for clean energy industries, not to mention the domestic-content provisions – the so-called Buy American clauses – the U.S. government placed on certain clean energy products. Mr. Zhang said, “Chinese subsidies to new energy companies are much smaller than those of the U.S. government. If the U.S. government can subsidize companies, then why can’t we?”

With the November midterm elections in the U.S. approaching, candidates in both parties recognize that the elections are defined in large part by bleak economic and employment statistics. In order to address these problems, the candidates have increasingly blamed Chinese trade policies for slowing the American recovery from the 2008 economic collapse.

Further, W.T.O. rules tend to be stricter against manufacturing subsidies than research and development subsidies. While the U.S. has many programs to subsidize research and development of clean energy, China has been very successful at manufacturing and exporting clean energy technologies inexpensively, particularly in solar panels.

China and the U.S. is in a difficult period of their relationship, particularly because the U.S. seems to support Japan in a recent showdown between China and Japan over a detained captain of a fishing boat near the boarder area. It remains to be seen whether all these factors, especially the election season, seriously affects the relationship between China and the U.S.

For more information, see the articles in New York Times and Asia Times.

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