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 New
AAM Study Cites Market-Distorting Impact of Explosive Growth in
Chinese Glass Production
October 13, 2009
Since 2003, glass production in China has increased by more than
$576 million--more than 67 percent--according to a recent study
titled “University Through the Chinese Looking Glass: Subsidies
to China’s Glass Industry from 2004-08,” by Dr. Usha Haley
of Harvard [CLICK
HERE to read the full report].
Prepared by the Economic Policy Institute (EPI) with support from
the Alliance for American Manufacturing (AAM), Dr. Haley’s
study cites the Chinese glass industry’s three-fold increase
in exports to the United States from 2000 to 2008. The U.S. trade
deficit with China on glass also tripled in the same period.
The report shows that China’s glass and glass-products industry
received total subsidies approximating at least $30.29 billion from
2004 to 2008. These subsidies spanned heavy oil, coal, electricity
and soda ash and have reached about 35 percent of gross industrial
output value of glass in 2008.
Citing massive increases in Chinese glass production and exports
during the current decade, the AAM is also urging the Obama administration
to address the Chinese government’s subsidies to its domestic
glass industry at an upcoming meeting with its Chinese counterparts
on trade issues.
In a letter to Secretary of Commerce Gary Locke and U.S. Trade Representative
Ron Kirk, AAM urged the Administration to “address the significant
and market-distorting subsidization by the Chinese government of
its domestic glass industry” at the Joint Commission on Commerce
and Trade (JCCT) scheduled to take place October 29 in Hangzhou,
China.
“Our domestic glass industry is the most efficient in the world,”
the letter states, “but it cannot compete against production
that is heavily subsidized by the Chinese government,” adding
that the global overcapacity of glass products created by the explosive
growth in Chinese production has led to U.S. “plant closings
and thousands of lost jobs.”
“Dr. Haley’s study is important because it shows the type
of competition U.S. companies are up against, in particular the
massive subsidized Chinese products received,” AAM executive
director Scott Paul, tells USGNN.com™. “We want to show
government officials that even the most efficient U.S. glass producer
will have a hard time competing against subsidized glass products
from China.”
Paul adds, “We encourage all glass companies to get in touch
with their congress people and make sure that they see this study
and ask that they bring it before the Obama administration and work
to make it a priority.”
As an example of what U.S. glass companies are facing, Paul points
to the construction of the new World Trade Center tower, which will
include Chinese-made glass (CLICK
HERE for related article). While a number of U.S. glass companies,
including Pittsburgh-based PPG Industries, spent months working
with the tower architects to plan and develop a new kind of glass
for floors one through 20 none were awarded the contract to make
the glass. (CLICK
HERE to read a related recent Washington Post article.)
Organizations, such as the United Steelworkers (USW), have applauded
the AAM for its actions.
In a statement, USW president Leo W. Gerard said the report "provides
compelling evidence that our government must step to the plate at
the upcoming commerce talks with China later this month to urge
a response that reduces the effect of subsidization on American
jobs in the glass industry. Rising joblessness makes it critical
that our government enforce fair trade laws to help reverse this
trend."
From 2001 to 2008 the U.S. glass industry lost almost 40,000 jobs,
a decrease of nearly 30 percent according to the U.S. Department
of Labor.
“With unemployment threatening to exceed 10 percent, the need
to challenge the Chinese government’s subsidies to its domestic
glass industry is essential to prevent further damage to our glass
industry, workers and economy,” adds Paul.
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