The meeting between vice-president Xi, expected to succeed Hu Jintao next year, and US president Barack Obama at the White House has begun to set the stage for the next phase of US-China trade relations.
Obama told reporters after the meeting: "We want to work with China," which includes resolving trade disputes, and he raised the issue of protecting US companies' IP. Details of the Obama administration's frustrations over the dispute between US-based AMSC and China's largest wind-turbine manufacturer, Sinovel, were included in briefing papers distributed by Obama officials before Xi's visit.
Just before the visit, leading Democratic senator John Kerry spoke in support of AMSC, which is based in his state of Massachusetts. "It's a very clear and, in our judgment, egregious and palpable demonstration of the practice that we are deeply concerned about," Kerry told the New York Times, referring to the US view that China is too lax on IP protection and enforcement. In China, AMSC is suing Sinovel for $1.2 billion, alleging theft of IP amongst other transgressions. Sinovel denies AMSC's allegations.
On the eve of Xi's visit, the US International Trade Commission (ITC) voted unanimously that there was "reasonable indication"
that America's wind-turbine tower industry had been injured by subsidised imports from China and of Chinese and Vietnamese imports being "dumped" at less than "fair value" on the US market.
The ITC's 10 February vote allows the US Department of Commerce (DoC) and the ITC to continue probing. A complaint was filed in December by the US-based Wind Tower Trade Coalition, comprising Trinity Structural Towers, DMI Industries, Katana Summit and Broadwind Energy. Tensions surrounding wind-energy components are complemented by a parallel US probe into China's subsidies of its solar-cell industry.
New trade panel
So concerned is the US that Obama asked the US Congress in February for $26 million to establish a new panel to investigate allegedly unfair practices by US trade partners. The inter-agency trade enforcement centre would "significantly increase our capacity to bring additional trade cases that will level the playing field against countries around the world, including China", said Gene Sperling, director of the National Economic Council.
In the US, China is viewed as unfairly supporting its nascent clean-energy industries in part to undercut foreign competitors. It is also said to undervalue its currency to keep the cost of all of its exports low. China accuses the US of being protectionist in a bid to prop up its ailing economy - and of engaging in election-year politicking.
In the towers case, the DoC is to issue a preliminary decision around 23 March regarding whether duties should be imposed on imported Chinese towers. It will release a preliminary decision on the alleged dumping by 6 June. The DoC could then require Chinese and Vietnamese exporters to deposit cash as security against the eventual imposition of import duties as high as 142% to 214%.