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China’s energy policy criticized

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Associated Press
Published:
  • Workers check on solar panels in Yulin, northwest China’s Shaanxi Province, in November.

    Associated Press

    Workers check on solar panels in Yulin, northwest China’s Shaanxi Province, in November.

BEIJING — In late 2009, President Barack Obama and his Chinese counterpart Hu Jintao announced an ambitious array of joint clean energy research projects touted as a mark of a maturing relationship and an alliance to fight climate change.
A year after Obama’s visit to China, the envisioned partnership has largely evaporated. The U.S. has filed a complaint at the World Trade Organization against China’s policies favoring its producers of wind and solar equipment. Cooperation in climate change talks has been rare.
On the eve of Hu’s U.S. visit, the conflict is emblematic of a range of areas, from climate to technology to reducing strains in the the global economy, where Beijing sees its interests as very different from Washington even as they pledge cooperation.
“On the main issues, there is open hypocrisy on both sides,” said Derek Scissors, an economist at the Heritage Foundation, a Washington think tank.
The stakes are significant. The United States and China are the two biggest economies and greenhouse gas emitters and are linked by $250 billion a year in trade. Whether they can cooperate is likely to be key to restoring the world economy to health and creating an effective program to forestall climate change.
The two governments have worked over the past decade to forge ties with regular Cabinet-level meetings and U.S. officials advise Beijing in fields from health to environmental enforcement. But across many economic issues they are moving toward conflict.
Beijing, citing its need to reduce poverty and avoid financial shocks, has rejected binding greenhouse gas limits and U.S. pressure to ease currency controls that critics say keep its yuan weak and swell China’s trade surplus.
On the U.S. side, a listless economy and high unemployment make it politically harder for Washington to argue for cooperation and add to pressure on Obama to press China over trade complaints.
In climate, the two governments trade accusations that they are blocking progress.
Similar conflict marks efforts to reinvigorate the world economy and ease global economic imbalances by reducing America’s huge trade and budget deficits and narrowing China’s multibillion-dollar trade surplus.
Beijing committed to boost its domestic consumption to cut reliance on exports and fuel demand for imports. But it has restrained the rise of its yuan against the dollar, which would increase the spending power of Chinese families. Analysts expect a Chinese trade surplus this year of about $200 billion — the same as 2010.
Washington promised to narrow its trade and budget deficits but spending outpaced revenue by $1.3 trillion last year. The U.S. Federal Reserve’s latest effort to stimulate the economy with $600 billion in bond purchases triggered alarm in Beijing, which warned it could fuel global inflation and erode the value of the dollar and China’s mountain of U.S. Treasury debt and other assets.
The current strains are at odds with Obama’s first year in office in 2009, when he talked up the importance of a partnership with Beijing on energy, the economy and other issues.
“Obama’s in a tough place because in the first two years of his administration, he made repeated cooperative gestures to China and got nothing in return,” said Jim McGregor, a senior counselor for consulting firm APCO Worldwide and a former chairman of the American Chamber of Commerce in China.
The American leader was received coolly on his November 2009 visit to Beijing. The next month in Copenhagen, U.S. envoys were dismayed when China led opposition to block agreement on a framework to limit growth of greenhouse gas output.

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