China has described the European Union’s accusations that two of its telecom equipment makers are receiving illegal government subsidies as groundless and unreasonable.
At the end of last month it was reported that the EU was planning a trade case…
China has described the European Union’s accusations that two of its telecom equipment makers are receiving illegal government subsidies as groundless and unreasonable.
At the end of last month it was reported that the EU was planning a trade case against Huawei and ZTE, both among the world’s top five telecom equipment makers, charging that they obtained illegal government subsidies and sold products in the EU below cost. Subsidies could come in the form of generous R&D grants or cheap financing from China Development Bank, it was suggested.
A spokesperson for China’s commerce ministry rejected this, saying Huawei and ZTE operate in free market conditions and are successful because of their R&D efforts, according to a Reuters report.
If the EU does push ahead with litigation it will mark the first time it has launched a trade case against a company without receiving complains from rival companies first.
The Chinese firm’s EU rivals – Sweden’s Ericsson, Paris-based Alcatel-Lucent and Finland’s Nokia Siemens Networks – all have substantial business interests in China.
Following news that the EU was planning to take action, Sweden’s trade minister Ewa Bjorling urged the commission not to proceed for fear of retaliatory measures from China, according to Reuters. She pointed out that while Chinese firms have 30% of the EU wireless equipment market, EU firms have 45% of China’s.
The EU is China’s biggest trading partner while China is the EU’s second. Bilateral commerce between the two is expected to cross the €500bn mark this year.
