The Chinese government has stepped up pressure on SolarCity Corp., the American solar company that was left reeling by an expiring contract and a shutdown of its plants in the U.K. The government is accusing SolarCity of illegally siphoning off government subsidies, violating trade agreements and failing to comply with China’s anti-corruption rules.
SolarCity says it is in the process of renegotiating the deal.
The dispute highlights the power of the United States, a key ally and economic partner, to influence Chinese policy.
“I would say that the Chinese government is trying to influence every aspect of Chinese business,” said John P. Trigg, director of the China Research Institute at the University of Chicago.
“China’s been very active in supporting companies like SolarCity in China.”
SolarCity, which has invested $1.3 billion in China, said in a statement that it is committed to maintaining its strong relationship with China.
The U.A.E. solar sector has been particularly hard hit by China’s policies, including a massive solar investment ban that banned foreign investment and shuttered its factory in the city of Chengdu, which was the first major solar plant to be shuttered.
The ban has been lifted and is expected to be reinstated by China in the coming weeks.
“This latest round of pressure from China is a direct result of U.B.C. trying to limit our access to government financing, in this case for the first time ever, and has not only damaged SolarCity’s business, but the UB.
E.’s ability to provide support for our local communities,” SolarCity said in its statement.
“It is not clear that the UBS investigation into the SolarCity scandal is sufficient to hold them accountable for their actions.”