SolarWorld testifies on Chinese IP theft

There is never a dull moment in the trade war over imports of Chinese solar products. And if you thought SQN Capital’s attempt to get Chinese manufacturers to pay them $55 million to make the Section 201 case go away was as good as it gets, then perhaps you missed Chinese Army agents hacking SolarWorld.

In May 2014 a grand jury indicted five agents of the People’s Liberation Army for hacking into computers owned by a nuclear power plant operator and the largest crystalline silicon PV maker in the Western Hemisphere, SolarWorld (among multiple targets). The indictment states that these agents then turned this information over to Chinese state-owned enterprises, to provide them with competitive advantages.

Court documents indicate that this hacking took place from May 2012 through at least September 2012, at which point SolarWorld was fighting the first of two trade cases against imports of Chinese solar cells, and later modules. It’s also at the time that SolarWorld was bringing to mass production Passivated Emitter Rear Contact (PERC) solar cells, as one of the first manufacturers in the world to do so.

The indictment was not the end of this peculiar case of economic espionage. Today SolarWorld Americas CEO Juergen Stein testified before a special committee of the U.S. Trade Representative on another case dealing with unfair competition from China. This “Section 301” case was initiated in August by order of U.S. President Donald Trump to look into Chinese theft of intellectual property (IP) and the Chinese requirement that companies seeking to enter China share their IP.

In his testimony, SolarWorld CEO Juergen Stein drew a link to the IP theft and the rapid adoption of PERC technology by his company’s Chinese rivals.

“While the five Chinese military hackers have never been brought to justice in this country, we firmly believe that were it not for their economic espionage and theft from SolarWord Americas, Chinese solar producers like JA Solar and Trina, would have taken far longer to make the leap into PERC technology,” argued Stein.

pv magazine reached out to Trina Solar and JA Solar for a response, but had not received one by the time this article was published.

It is unclear what the conclusion of the Section 301 case will be. Like Section 201, Section 301 gives the U.S. government broad authority to take action, including removal of concessions granted to a foreign company and retaliatory measures. Unlike Section 201 trade authorities will make this determination, not the president.

Like Section 201, there are few recent cases to refer to. The most recent cited on the U.S. Trade Representative website is a case under which the U.S. used World Trade Organization-approved retaliatory tariffs to force the EU to accept beef from cattle treated with growth hormones in 2009.

SolarWorld’s legal counsel told pv magazine that the Section 301 case has no bearing on the Section 201 case or any trade remedies imposed in that process. And while SolarWorld is not seeking any particular action through Section 301 at this time, one possible outcome could be more tariffs on Chinese imports, in addition to the anti-dumping and countervailing duties imposed in 2012 and 2014.