The United States enjoyed a $1.63 billion surplus in trade with China for clean-energy goods and services in 2011, showing that US companies in the sector have an advantage over their Chinese counterparts, according to a new report.

Trade between the world's two biggest economic powers for green products such as solar and wind power equipment totaled about $8.5 billion in 2011, last year for which complete data were available, the Pew Charitable Trusts said in its report issued Wednesday.

"There is competition but also collaboration among China and the US. It would be beneficial for both countries to collaborate on clean energy," Phyllis Cuttino, director of Pew's clean-energy program, told China Daily.

The report, which used data and analysis from Bloomberg New Energy Finance, covers three major subsets of the clean-energy sector: solar, wind and "energy smart" (energy-efficient) technologies. Solar energy accounted for 56 percent and energy-smart technologies 35 percent of the surplus, according to Pew's report.

In 2012, however, there was a steep drop in the value of US clean-energy imports from China. "We see a decrease of 37 percent in imports of solar panels from China. At the same time, we see increased imports of goods from other countries of East Asia and Europe," Nathaniel Bullard, a Hong Kong-based analyst for Bloomberg New Energy Finance, said in response to a question during a conference call on Wednesday.

Bullard attributed the decline in imports from China to tariffs, while increases from countries such as the Republic of Korea, Japan and Malaysia were competition-driven. Other factors, he said, were slumping US demand for products such as solar panels and a stronger yuan against the dollar, which made Chinese exports more expensive to produce.

"If the price is going down, the value is going down, so naturally the volume is going down as well, because of the trade cases," Bullard said. "I don't think there's been a change in the US comparative advantage, but there has been a change in the direction the money's been flowing."

Tensions between China and the US over clean energy in recent years, including several high-profile trade disputes, have led to the misperception that China is the dominant supplier in the industry.

In December, the US Commerce Department proposed anti-dumping duties of 24 percent to 250 percent on imports of Chinese-made solar panels. In January, the department's International Trade Commission finalized anti-dumping duties of between 45 percent and 71 percent on imports of utility-scale wind towers from China. Chinese wind-tower makers also face additional tariffs of up to 35 percent, based on US claims that China's government unfairly subsidized domestic manufacturers in the industry.

Chinese authorities deny the US claims and have begun investigating US suppliers of polysilicon, which is used in manufacturing solar cells, the components in panels that convert sunlight into electricity.

Asked about these and other trade disputes in the sector, including cases involving the European Union and India, Bullard said: "The flurry of legal activity that is impairing trade that is going on around the world is probably normal when you have developing young markets."

"I don't think it is particularly productive in terms of raising the welfare of all the consumers involved. These are, after all, things that impair supplies and drive up pricing," he said.

Ren Dongming, deputy director of the Center for Renewable Energy Development under China's National Development and Reform Commission, concurred that Chinese imports of clean-energy goods and services shrank considerably in 2012, largely due to the trade cases.

He called 2012 "the most difficult year for Chinese solar companies. Most of them shut down; only a few survived, but they are still struggling. "The costs of China's solar products and components have greatly increased, and that has also hurt US manufacturers' interests," Ren said.

Of the $8.5 billion total from 2011 cited in the Pew report, the two countries traded more than $6.5 billion worth of solar-power goods and services alone. The US had a $913 million surplus in that industry.

In wind energy, more than $923 million worth of goods and services changed hands, with US companies reaching a surplus of over $146 million.

In the $1.1 billion business of energy-smart technologies -meters, light-emitting diodes, advanced lithium-ion batteries, energy-efficient light bulbs, electric vehicles and other products - the US surplus with China was $571 million.

The $1.63 billion figure includes US companies with overseas operations selling into the Chinese market.

The Pew-Bloomberg data showed that China's clean-energy industry has an advantage in large-scale manufacturing and high-volume assembly of products such as wind towers, solar modules and LED fixtures. US companies lead in the manufacturing of equipment and specialty materials for renewable-energy systems.

"The United States is viewed primarily as a services economy and an insatiable importer," Michael Liebreich, CEO of Bloomberg New Energy Finance, said in the report. "China's dominance in complete solar modules obscures its meaningful imports of higher-margin capital equipment, specialty materials and polysilicon."

The report concluded that policy choices, not Chinese exports, "will determine the direction of the US clean-energy industry in the months and years ahead".

Many political and business leaders in the US complain that Washington lacks a comprehensive strategy for attracting clean-energy investment. Uncertainty about government policies in clean energy will likely have the biggest impact on development of US domestic manufacturing in the sector, Pew's Cuttino said.

"China has very strong renewable-energy targets for wind and solar," she said. "The countries that really attract large private finance or have high-growth investment are the ones with stable energy policies."

Hoil Kim, vice-president of GT Advanced Technologies Inc, a New Hampshire company that makes and exports equipment used in manufacturing solar-power products, praised the clean-energy goals laid out in China's 12th Five-Year Plan (2011-15). "We welcome every announcement about aggressive goals set by the Chinese government. It's more opportunities for us," he said.

Contact the writers at lanlan@chinadaily.com.cn, chenweihua@chinadailyusa.

com and josephboris@chinadailyusa.com

(China Daily 03/07/2013 page1)