China files WTO challenge to US tariffs on solar panels

China files WTO challenge to US tariffs on solar panels
The 30 percent tariffs announced in January improperly help US producers in violation of WTO rules, China’s commerce ministry said. (Reuters)
Updated 15 August 2018

China files WTO challenge to US tariffs on solar panels

China files WTO challenge to US tariffs on solar panels
  • The 30 percent tariffs announced in January improperly help US producers in violation of WTO rules, China’s commerce ministry said
  • China has tried to portray itself as a defender of the WTO-based trading system

BEIJING: China says it is challenging a US tariff hike on solar panels before the World Trade Organization, adding to its sprawling conflicts with President Donald Trump over trade and technology.
The 30 percent tariffs announced in January improperly help US producers in violation of WTO rules, the Commerce Ministry said. It said a formal complaint was filed Tuesday with the WTO in Geneva.
The solar duties are separate from tariff hikes imposed by the Trump administration starting in July on Chinese imports in response to complaints Beijing steals or pressures companies to hand over technology.
The duties also apply to imports of solar cells and modules from Europe, Canada, Mexico and South Korea. That strained relations with US allies.
The Trump administration has defended the solar tariffs as necessary to protect American producers, saying import prices were unfairly low due to subsidies and other improper support.
Washington took action under a 1974 US law instead of through the WTO. That led to complaints it was undermining the global trade body. US officials say such action is necessary because the WTO lacks the ability to address Chinese trade tactics.
China has tried to portray itself as a defender of the WTO-based trading system. It has attempted to recruit European and other governments as allies against Washington, but they echo US complaints about Chinese market barriers and industrial policy.
The European Union filed its own WTO complaint in June against Chinese technology policies it said violate Beijing’s free-trade commitments.
The US solar action “seriously damaged China’s trade interests” and “also affects the seriousness and authority of WTO rules,” said a Commerce Ministry statement.
WTO complaints begin with negotiations between parties to the dispute. If those fail, the case moves to a panel of experts who can decide whether the trade controls are improper.
In their technology dispute, Washington imposed 25 percent duties on $34 billion of Chinese goods it said benefit from improper industrial policies. Beijing responded with similar penalties.
Another round of US tariff hikes on $16 billion of Chinese goods is due to take effect Aug. 23. Beijing says it will retaliate.
Earlier, Beijing filed a separate WTO challenge on July 16 to Trump’s proposal for yet another round of increases that would add 25 percent import duties on an additional $200 billion of Chinese goods.


Jack Ma video reappearance fails to soothe all investor concerns

Jack Ma video reappearance fails to soothe all investor concerns
Updated 53 min 38 sec ago

Jack Ma video reappearance fails to soothe all investor concerns

Jack Ma video reappearance fails to soothe all investor concerns
  • Ma had not appeared in public since Oct. 24, after he blasted China’s regulatory system
  • Chinese regulators have set about reining in Ma’s financial and e-commerce empires

HONG KONG: Billionaire Jack Ma’s 50-second video reappearance has done little to resolve Alibaba Group’s troubled relationship with regulators that is making some investors hesitate about owning the Chinese e-commerce giant’s stock.

Relief at Ma’s first public appearance added $58 billion in market value on Wednesday as Alibaba’s Hong Kong-listed stock soared, though doubts crept in a day later and the stock fell more than 3 percent as the broader market steadied near two-year highs.

Ma had not appeared in public since Oct. 24, when he blasted China’s regulatory system. That set him on a collision course with officials and led to the suspension of Alibaba fintech affiliate Ant Group’s blockbuster $37 billion IPO.

A source familiar with the matter said Ma cleared his schedule late last year to keep a low profile, prompting discussion at Alibaba about when and how he should reappear to assure investors.

It was decided he should do something that would appear as part of his normal routine, rather than anything overt that could irk the government.

While Ma has stepped down from corporate positions, he retains significant influence over Alibaba and Ant, and the regulatory crackdown on his business empire coupled with his absence was a concern for some investors.

There was skepticism that Ma’s brief reappearance meant all was well with his businesses.

“The coast is not all clear for Alibaba and it is a judgment call whether you believe the company can still thrive in the changing environment,” said Dave Wang, a portfolio manager at Singapore’s Nuvest Captial, which owns Alibaba stock.

“Without some skepticism, the price would be a lot higher,” he said, adding his firm had increased exposure to China and with it Alibaba, which he believes can prosper over the medium to longer term.

Two of the company’s investors in the US who have sold out or reduced positions in Alibaba said they needed more reassurance about the company and the regulatory environment before reconsidering the stock.

“One of our top criteria is leadership and we were investing in Alibaba because I really respect Jack Ma as a leader,” said William Huston, founder and director of institutional services at independent investment advisory firm Bay Street Capital Holdings in Palo Alto, CA, with assets under management of $86 million.

“We all know that just because he showed up ... doesn’t necessarily explain what is going on.”

Huston, whose firm cut its holding in the Chinese firm last year from 8 percent of its portfolio to less than 1 percent, said the halting of the Ant IPO in November had caused uncertainty, and that Alibaba was “not a prudent investment” for it going forward.

David Kotok, chairman and chief investment officer at Cumberland Advisers, Florida, which has about $4 billion in assets, said he held Alibaba last year but also sold as the Ant IPO was pulled.

“When you don’t know what to do in an evolving situation like this you can’t use traditional securities analytics to reach decisions. We are standing aside and watching,” Kotok said.

Chinese regulators have set about reining in Ma’s financial and e-commerce empires since the Ant IPO suspension, which has weighed on its stock that remains below levels prior to the cancelation of the Ant IPO.

“What his actual state is will be completely up to Beijing to reveal to us,” Leland Miller, CEO of US-based consultancy China Beige Book.

“What we do know is whether Jack is running around, Jack is hiding or something else, Alibaba is not in the clear. There is a lot more of the story still to see.”

Some investors are, however, betting on long-term potential for Alibaba in the world’s second-largest economy.

Dennis Dick, a proprietary trader at Bright Trading, who holds Alibaba shares, said he had protected against a potential fall when speculation about Ma’s whereabouts began by buying put options.

He covered those puts earlier in January on a report that Ma was OK and retains a long position in the stock.

“We have been investors for many years ... there’s a very strong team of executives and Alibaba is bigger than just one person,” said a Hong Kong based long-only investor, declining to be named as he was not authorized to speak to the media.