The EU’s trade chief will seek the backing of EU states to investigate Chinese telecom equipment makers Huawei (華為) and ZTE (中興), even without a complaint from European manufacturers, EU diplomats said on Tuesday.
The European Commission, the EU’s executive body, has been collecting evidence to prepare a possible case against Huawei and ZTE over state subsidies it says allows the companies to undercut European firms.
EU trade investigations normally begin with a company complaint, but European manufacturers Ericsson, Alcatel-Lucent and Nokia Siemens Networks have refused to cooperate with the commission because of fears that they could be shut out of the growing Chinese telecom market in retaliation, people familiar with the matter say.
That leaves European Commissioner for Trade Commissioner Karel De Gucht with the choice of letting the matter drop, or of pursuing an investigation at the commission’s own initiative.
De Gucht, who supports taking a tough stance with China on trade issues, will take the unusual step sounding out EU trade ministers on the issue at a meeting in Dublin this week, the diplomats said.
EU countries are divided in their approach to Huawei, with Britain and the Netherlands embracing the Chinese firm as a major job provider, while others are more wary of Chinese inroads into the sensitive sector, which is the backbone for wireless devices used by consumers, offices, and even utilities.
De Gucht said in February there were “serious security concerns” involving mobile telecoms networks. He said the US and Australia had effectively shut Huawei out of their markets.
EU members are also concerned about national security issues. Last year, Germany excluded Huawei from supplying the infrastructure for a national academic research network.
Huawei denies receiving unfair subsidies and maintains that its advantages are due to low-cost manufacturing and innovation.