China and Solar

Macro & Microeconomics
2 pages (500 words)
Since china joined the World Trade Organization, the United States has experienced massive losses. Chinas government’s aim is to take over the solar business. This is evident in the country’s solid support for its manufactures[1]. The solar industry in China is getting unlawful subsidies exporting its products and dumping them into the US market at unbelievably low prices (Lacey, 2001).

The china’s state backed solar industry is getting their illegal subsidies and crystalline silicon solar goods unlawfully into the US market. This has caused a ruin of American manufacturing and distorting fair competition. Furthermore, it has affected the American citizens negatively because some of them have lost jobs[2]. China’s breaching of laws has affected the US in general by making it difficult for their manufactures to have the same level of competition with China’s solar manufactures in their own market and globally (Pmsolarpy,2011).

Apparently, the U.S market is open to all the Chinese companies because they can illegally export all their solar merchandise in the US. The illegal subsidies allow the Chinese to sell their goods at lower prices by a very huge percentage compared to the US prices. Chinese competitors cannot export their goods because they have blocked all their subsidies and markets. This makes their business unlawful[3] (Lacey, 2001).  Moreover, China has failed to index its subsidies with WTO after every two years as per the agreement when it joined the organization.

Additionally, China’s unlawful actions are challenging the fair market value; thus, the United States solar manufacturing is at a risk of being eliminated. The illegal practice has made China drop the prices of their solar products when their current prices are compared with their past prices. This is evidence of China’s huge damping and subsidies because the costs of producing the solar products are so high. It would be impossible, for china drop their prices by a huge percentage within a year. This lowering of prices by china has led to the closure of US entities. Consequently, this has caused a lessening of jobs in the US[4] (Lacey, 2001).

China’s support for the sector has made the fabrication plants produce massive solar products causing an increased supply of the goods leading to the high drop of prices. This is beneficial to the consumers of such goods since they enjoy cheaper prices. For the US manufacturers, they are facing difficulties because they cannot sell their goods cheaply since the cost of fabrication is high[5] (Lacey, 2001).

If China’s illegal actions are not stopped immediately, it will monopolize the distribution and manufacturing of the solar products in the United States. This would eventually lead to the increase of US dependence on China thus causing more Americans to lose their jobs. Furthermore, continued illegal solar market will affect the world because they will not have competition on pricing making them become independent price-setters. It is important that overseas and local solar companies request burning examination of the iniquitous trade practices. The matter should be examined, and the Chinese illegal practices should be stopped immediately to avoid further economic problems.


Pmsolarpy. (2011). Chinese Solar Cost Fight Back! US- China Solar Trade War in the    Marketing!? EAI Club. Retrieved from

Lacey, S. (2001). Are We in a Solar Trade War with China?. Grist. Retrieved from

[1] China is illegally damping solar goods into the US market.

[2] US manufacturers cannot compete with China’s because of china’s low prices of solar goods.

[3] China business is illegal because it has blocked other countries from exporting their solar goods                in the      country.

[4] China’s illegal market for solar goods has caused many Americans to lose their jobs.

[5] US cannot sale their solar goods at low prices like China because of the high cost of     manufacturing.