China on Saturday hit back at U.S. government action to investigate a labour union's charges that it subsidises its green technology producers, saying the move sends a wrong signal on trade protectionism.
The U.S. probe will look into whether Chinese support for its clean energy sector was a violation of World Trade Organization rules, as requested by the United Steelworkers Union.
China's commerce ministry said in a statement the charges by the union were "groundless and irresponsible" and it regretted that the U.S. government agreed to open investigations.
"The U.S. government's acceptance of the appeal and its decision to launch a probe into the issue is sending a wrong signal of trade protectionism to the rest of the world," an unnamed official with the commerce ministry's division to safeguard fair foreign trade said in a statement on its website (www.mofcom.gov.cn).
The official said the United States was also promoting its energy sector and more than 2,300 projects, including those related to clean energy, were eligible for government subsidies.
"As such, the U.S. has no reason to blame other countries' efforts to improve the well-being of mankind."
China will protect its rights and interest in accordance with WTO rules, the official said.
I've said this before, and I'm going to keep saying it. I think that in the coming years, subsidies designed to promote domestic production of clean energy are going to be an ever greater source of trade conflict. One solution would be an agreement on the amount of subsidies permitted in this area. That hasn't worked in the aircraft industry, though, and I doubt there's much hope here. Another solution would be to subsidize consumption, rather than domestic production, which sounds great in theory but I don't know if the political will is there.