Several American and Chinese companies in the renewable energy field are expected to sign commercial agreements in the coming days during Chinese President Hu Jintau’s state visit, a U.S. official confirmed last week. But while that prospect has some environmental groups cheering, labor critics worry negotiating business deals with the communist-controlled country will hurt the U.S. economy.
Despite multiple concerns ranging from China’s human-rights violations to economic distrust, the energy deals are likely to go through and will mainly involve joint ventures between U.S. and Chinese companies in the solar, wind, and clean coal industries. The U.S. Department of Energy (DOE) has so far not released the names of the companies involved, or how much the deals are worth. General Electric, however, did announce it was going to sign agreements with Chinese companies.
But U.S. labor unions, for one, are not happy. The United Steelworkers Union has even accused China of manipulating trade policies and subsidies to artificially create green jobs in China, rather than the U.S. Some labor organizations have even claimed that Congress’ failure to pass a comprehensive energy bill has netted billions of dollars of revenue for China’s energy sector — billions that could have stayed in the U.S.
Environmental groups, on the other hand, view China as leading the U.S. in renewable energy technology. Thus, any partnership between two nations would be beneficial. For example, according to the group Greenpeace, a wind turbine is built in world every three minutes, and one out of three are built in China. In 2009, in fact, China led the world in wind turbine manufacturing.
DOE Secretary Steven Chu also reiterated the need to compete with China in the energy sector last November when he said that the U.S. race with China for the largest share in the burgeoning green energy economy represented a new “Sputnik moment.” Chu noted that while China has met its energy challenge, the U.S. was going to need more government investment to keep up.
But while commercial agreements may represent a step forward in energy technology, they may not be entirely beneficial for American business. In other words, there could be a trade-off between the economy and the environment. “On the environmental side, it doesn’t matter where new equipment, ideas, and funding come from, as long as they help,” Derek Scissors, research fellow at the Heritage Foundation told The Daily Caller. “On the economic side, it can matter.”
“The question is whether we halt our cooperation with China on green energy until they reduce their subsidies or we continue to cooperate while protecting our technology and examining Chinese subsidy practices in green energy,” added Scissors.
Put more simply, either U.S. energy companies can work with their subsidized Chinese counterparts, or they can watch China continue to surge ahead in the renewable energy field. But while cooperation is a win for environmentalists, some (like labor groups) will worry that giving China an even bigger share in the energy market will make it easier for companies to outsource jobs to take advantage of cheap labor.
But while those tensions are exacerbated this week with President Hu’s visit, Dan Ikenson, director of the Cato Institute’s Center for Trade Policy Studies, said that while U.S. companies have to compete with increasing protectionist economic policies, a good working relationship is mutually beneficial.
“By and large, the relationship has been broadly beneficial for Americans and Chinese,” Ikenson told TheDC. “It just happens to be the case that Americans’ perceptions of China aren’t as rosy as they should be and policymakers like to make hay out of the friction in the relationship.”