EU to allege that China is subsidising equipment vendors

28 May 2012

The European Commission is reportedly set to launch one of its largest trade cases having compiled evidence that China’s telecommunications equipment companies are benefitting from illegal state subsidies.

The Financial Times reports that the case focusses on vendors Huawei and ZTE and could begin as early as next month.

In a meeting held last week, EU officials reportedly informed representatives from all 27 EU member states that the commission was in possession of evidence that Huawei and ZTE had benefitted from illegal government subsidies and had sold products in the EU below cost.

If the EU determines that the Chinese government has acted illegally, it could inflict punishing tariffs on Chinese companies.

European vendors are said to be concerned about the impact that a trade case could have on their business. Nokia Siemens Networks, Alcatel-Lucent and Ericsson all have investments in China and are worried about retribution from the country’s government.
 
There is also concern that any case could damage relations between the EU and China at a time when the European continent is in a poor financial state.

Topics: European Commission, EU, equipment vendor, Huawei, ZTE, China