China to launch probe into US renewable energy policy

China today announced the launch of an investigation into US government policy and subsidy support for renewable energy, following the US administration's move to probe sales of Chinese-made solar panels.

The commerce ministry's announcement also comes after China's solar industry association said on Tuesday that Chinese solar companies might ask Beijing to launch an anti-dumping and subsidy probe into imports of US polysilicon, the raw material that finds application in the manufacture of solar cells.

Analysts say the tit-for-tat investigations highlight the trade tensions between China and the US, as leaders warn that protectionism was rising even as the outlook for the global economy seemed bleak.

China's undervalued currency is the major bone of contention between the two economic powers and US president Barack Obama had taken China to task in recent discussions of trade barriers, saying China was now grown up and needed to act that way in international affairs.

"The ministry of commerce has decided to initiate a trade barrier investigation into policy support and subsidies for the US renewable energy sector," a statement on the ministry's website (www.mofcom.gov.cn) said.

It said Chinese companies argued that the US policies "constitute a trade barrier against the export of Chinese renewable energy products to the United States".