The WTO and China's Renewable Energy: An Application of Anti-Subsidy Rules to China's Green Sector Manufacturing Subsidies

Abstract

China’s renewable energy subsidies have come under immense international scrutiny in recent years for violating international trade rules. In becoming the world’s largest green sector investor in 2012, the PRC government’s aggressive subsidisation and support of the industry has significantly reduced the costs of domestic production of wind turbines and solar panels. Foreign governments worldwide, including the EU and US, have expressed their opposition to China’s government subsidies by filing complaints at the World Trade Organisation, alleging breaches of the Agreement on Subsidies and Countervailing Measures.As such, this study aims to apply the WTO’s anti-subsidy rules as they currently stand to China’s green sector governmental subsidies. The main analysis is therefore split into the following four conditions necessary to establish liability under the Agreement: (1) The ‘Public Body’ Determination, (2) The Benefit Analysis, (3) Specificity, and (4) Adverse Effects. By doing so, the thesis strives to carry out an assessment of the legality of China’s green sector subsidy regime, as well as revealing the various issues and shortcomings of the SCM Agreement’s application. On this basis, tentative proposals and recommendations for reform are suggested.