US wind power petition won't hurt Chinese firms

BEIJING - The petition from a coalition of US wind power companies seeking anti-dumping and countervailing investigations against China won't hurt the domestic industry, said Shi Pengfei, vice-president of the Chinese Wind Energy Association.

"China doesn't export a large number of wind turbines to the United States, so the petition will not have much effect on the companies," he said. "It won't affect the domestic market, either."

He said that Chinese industrial associations should learn from their US counterparts on how to make use of the legal system to protect domestic companies' benefits.

The Wind Tower Trade Coalition (WTTC), a coalition of producers of wind towers in the US, filed a complaint with the US Department of Commerce and International Trade Commission (ITC) on Dec 29, claiming that Chinese and Vietnamese wind tower producers are dumping products in the US market at below-cost prices and receiving government subsidies.

The new petition, which covers metal towers that hold turbines aloft at wind farms, followed a solar panel probe into Chinese manufacturers initiated by a group of US companies in October. The latest petition is seen as likely to make renewable-energy trade disputes between the US and China more heated.

The petition aims at raising import tariffs on wind towers from China to more than 64 percent.

Titan Wind Energy (Suzhou) Co Ltd, one of the top wind power producers in China, was listed in the petition. According to industrial insiders from the association, the company provides wind towers to many wind turbines manufacturers in China.

Zheng Kangsheng, secretary of the board of Titan, said the company will cooperate with the ITC's investigation. Zheng said it was premature to talk about any possible adjustment in the company's overseas strategies.

Han Junliang, president of China's biggest wind turbine producer, Sinovel Wind Group Co Ltd, said the petition will not have an effect on the company.

Ken Xu, vice-president at Vestas Wind Technology (China) Co Ltd, said the company exported 70 wind towers to the US in 2011 and the number will increase this year. Titan is one of the two wind tower suppliers to Vestas.

"The impact of the petition is very limited," he said. "The production cost of wind towers in the US is higher than it is in China because of the higher labor cost. So, most Chinese companies choose the domestic suppliers."

Senior officials at Xinjiang Goldwind Science and Technology Co declined to comment on the petition.

The towers are one of the components for wind stations that are most often exported to the US from China, so it is easy to understand why US companies choose towers as the target of an anti-dumping investigation, said Li Shengmao, senior industrial researcher at the CIC Industry Research Center.

He said the cost of a tower represented 20 percent of an entire wind turbine, and it doesn't require much technology, so Chinese companies have more advantages when it comes to cutting costs because of lower wages in China.

However, the investigation into wind towers is just the beginning of the trade disputes between the US and China over wind power.

Li said China has not expanded its wind power market into the US on a large scale, so the competition with US companies is not tough enough to spark a bigger trade dispute.

As the Chinese companies take rapid steps to expand overseas in the coming years, it is very possible that US companies will start anti-dumping and anti-subsidies probes into the whole wind- power industry.

The companies that were not listed in the petition this time should be prepared.