As it goes with having the world's most vibrant economy, China is the target of heated accusations of cheating to get there. Often it is guilty as charged, which is the case with a decision yesterday by the Obama administration to slap tariffs on Chinese solar module manufacturers after a finding that they are illegally subsidized.
Yet, did China in fact get off easy? The answer is yes, and the reason is President Barack Obama's conflicting duties -- to avoid a dangerous trade war with China, while also winning re-election.
Here briefly are the facts: In October, a group of U.S. solar panel makers filed a complaint saying that Chinese rivals were driving them out of business on the back of government subsidies. To charges that U.S. companies are subsidized, too, the plaintiffs said that, unlike their Chinese rivals, 95 percent of their product is not aimed at exports.
To even the playing field, they sought high tariffs on Chinese-made panels. In December, the International Trade Commission sided with the U.S. companies, and yesterday, the U.S. Commerce Department followed up with the penalty: a 2.9 percent duty on products sold by a Chinese company called SunTech, a 4.73 percent duty on Trina Solar, and 3.61 on the rest of China's solar producers and exporters.
No one -- not the American plaintiffs nor the Chinese defendants -- complained. The New York Times' Keith Bradsher and Matt Wald quote a Chinese official named Li Junfeng: "I'm happy that it's not a lot, but not surprised -- the Chinese government does not give too many subsidies to the companies."
Photo by Feng Li/Getty Images
The fuss over Afghan oil: Afghanistan has finalized its first oil deal in decades -- an agreement with the China National Petroleum Company to develop fields in the northern part of the country. That could make Afghanistan a small oil-exporting country in a few years. Meanwhile, though, there continue to be grumbles from one of the three losing bidders in the tender -- Zalmay Khalilzad, the former U.S. ambassador to Afghanistan, whose private consulting firm, Gryphon Capital Partners, represented the bid of Tethys Petroleum, a U.K.-based oil company. In a series of articles, Khalilzad and his son, Alexander Benard, have criticized the tender process and the Pentagon contractors who helped to write the rules governing it. The Pentagon's Task Force on Business and Stability Operations, Khalilzad asserts, devised the tender in a way that is "slanted toward state-owned foreign competitors" such as CNPC, and against private Western firms such as his client. Khalilzad wrote his most recent piece as a rebuttal to a post on this blog in which I suggested that the essence of his and his son's complaint is not a pro-Chinese slant, but this: sour grapes.
But one set of folks with whom no one has spoken is the target of the Khalilzad family's ire. Not surprisingly, the Pentagon is unhappy with the allegations. "Zal might not like the outcome, and that's his business, but what this shows is that the system worked," one Pentagon official told me. "There are winners and losers in every tender process, and losers are never happy about it. But it is quite another thing to start lobbing allegations about misconduct with nothing to back that up. It's incredibly irresponsible."
Read to the jump for more on the Afghan deal and the rest of the Wrap.
Steve LeVine is the author of The Oil and the Glory and a longtime foreign correspondent.