(Adds comments, analyst quotes, changes dateline)
WASHINGTON/HONG KONG, June 7 China has agreed to
stop subsidizing wind power companies that use home-made parts
rather than imports, a spokeswoman for the U.S. Trade
Representative's office confirmed late on Monday.
The decision is a victory for the United Steelworkers union,
which last year urged President Barack Obama's administration to
challenge a swath of Chinese clean energy measures that it said
violated World Trade Organization rules.
China's ministry of commerce could not be reached for
USA Today, quoting U.S. Trade Representative Ron Kirk,
reported on its website that China had agreed to stop providing
the subsidies ranging from $6 million to $22 million.
"This outcome helps ensure fairness for American clean
technology companies and workers," the newspaper quoted Kirk as
The USTR is expected to announce details of the settlement on
Tuesday in Washington.
The agreement comes as the Obama administration is struggling
with continued high unemployment and concern about the ability
of the U.S. economy to generate enough new jobs to bring down
the unemployment rate.
Obama has highlighted green technologies such as wind power
as a promising source of job creation.
But while the United States applauds China's decision to halt
subsidies to wind power firms, the move is unlikely to prevent
China's biggest power producers from moving ahead with plans to
expand beyond China.
"Chinese wind power companies have reached a stage that
irregardless of subsidies, they will head out and aim for
overseas markets if there are opportunities," said Dennis Lam,
analysts with DBS Vickers.
China's largest wind turbine makers Sinovel Wind Group Co
and Xinjiang Goldwind Science and Technology
- also among the world's biggest wind turbine makers
- had announced plans to supply markets overseas. Goldwind
established last year a wholly-owned U.S. unit in Chicago,
marking its ambitions to serve the U.S. markets.
Analysts and industry executives in China believe any
announcement from Beijing to halt subsidies to wind firms should
be interpreted as a political gesture, and is unlikely to
constitute major changes to China's overall policy of
strengthening the industry.
"I wouldn't think this to be a major policy shift on the
part of China. From the outset, the issue was more symbolic and
more of a political gesture," said a senior executive at Suzlon
Energy's China unit.
"Removing one or part of the subsidies offered
manufacturers, won't mean a strategic shift from the overall
policy framework," he said.
China has said its new five-year plan for renewable energy
will include pledges to boost wind power capacity. The country
has built the most wind power capacity in 2010, adding 18.9
gigawatts and bringing its total capacity to 44.7 GW, according
to Global Wind Energy Council.
In 2010, China overtook the United States as the country
with the most installed wind energy capacity. [ID:nLDE73517W]
(Reporting by Doug Palmer and Leonora Walet; Additional
reporting by Michael Martina; Editing by Jacqueline Wong)