China has agreed to halt subsidies to wind power manufacturers that violate World Trade Organization (WTO) rules, according to US Trade Representative Ron Kirk.
The move comes after the United Steelworkers Union filed a complaint to the WTO.
The Chinese currently subsidise wind-power firms that use domestic parts instead of imports.
Mr Kirk said this gives them an unfair advantage over US wind turbine makers.
“The US is pleased that China has shut down this subsidy program,” said Mr Kirk.
There was no comment in response to the statement from China.
China’s move comes as the US faces high unemployment and concerns about being able to generate enough new jobs.
“We challenged these subsidies so that American manufacturers can produce wind turbine components here in the United States and sell them in China,” said Mr Kirk.
“That supports well-paying jobs here at home.”
Mr Kirk also criticised China for not providing regular information to the WTO about its subsidy programmes.
“China is the second largest trader at the WTO, and it is simply not acceptable that China continues to evade its transparency commitments,” he said.
While the decision is being hailed as a victory for the US, analysts say it is unlikely the move will slow down the development of China’s renewable energy sector.
“Chinese wind power companies have reached a stage that, regardless of subsidies, they will head out and aim for overseas markets if there are opportunities,” said Dennis Lam from DBS Vickers.
China’s biggest wind turbine makers, Sinovel Wind Group and Xinjian Goldwind Science and Technology, have already announced overseas expansion plans.