From a WSJ blog:
We’ve noted before how China’s headlong push into wind power could put pressure on the rest of the global wind industry. Chinese turbines need the same scarce components as the turbines being built and installed in Europe, India, and the U.S.
Now that pressure’s rising, China is raising tariffs on imported wind turbines and slashing tariffs on imports of turbine parts—all part of a campaign to jumpstart China’s domestic wind-turbine manufacturing industry.
Xinhua reports today that China will refund value-added tax and slash tariffs on wind-turbine components imported to feed the country’s burgeoning domestic wind-turbine-manufacturing industry. That will give Chinese turbine makers a freer hand to bid for many of the thousands of tiny components that make up turbines, even as supply-chain bottlenecks for many of those components persist around the world.
And starting May 1, the government will scrap the tax holiday for imports of most wind turbines (those under 2.5 megawatts). That will make it more expensive for big turbine makers like Vestas of Denmark and Suzlon of India to sell their wares in China.
Should tariff protection ("raising tariffs on imported wind turbines") and subsidies ("refund value-added tax ... on wind-turbine components") be used to promote clean technologies? More competition in this industry is probably good, so as to bring down prices. But trade disputes based on perceived violations of WTO rules might not be for the best.
