EU cites China’s Huawei and ZTE for trade violations

Reuters, NEW YORK

Sun, May 19, 2013 - Page 1

Europe’s top trade official for the first time officially cited Chinese mobile telecommunications equipment makers Huawei (華為) and ZTE Corp (中興) for violating anti-dumping and anti-subsidy guidelines late on Friday.

EU Commissioner for Trade Karel De Gucht said he was prepared to launch a formal investigation into anti-competitive behavior by the Chinese companies in order to protect a “strategic” sector of Europe’s economy.

“Huawei and ZTE are dumping their products on the European market,” De Gucht told reporters.

An investigation into the sales practices of Chinese telecoms companies would open a new front in a multibillion-euro trade offensive against a critical partner.

The EU is China’s most important trading partner, while for the EU, China is second only to the US. Chinese exports of goods to the 27-member bloc totaled 290 billion euros (US$372 billion) last year, with 144 billion euros going the other way.

Cheap capital for these Chinese companies “creates a distorted playing field and that is what this is about,” De Gucht said, referring to Huawei and ZTE, respectively the world’s No. 2 and No. 5 telecoms equipment makers.

Huawei denied it had broken any rules.

Separately, the China Daily quoted Huawei’s Western Europe president, Tao Jingwen (陶景文), as saying that the firm’s rivals were blaming the company for their own failures.

“Some European companies have blamed Chinese companies for their losses, but sometimes they were caused by their own laziness,” Tao said in a report before the publication of De Gucht’s remarks.

De Gucht’s office on Wednesday said an investigation was prepared, but put on hold. At the time no companies were officially named. The pause is to allow further negotiations with China in hopes for a resolution.

China responded on Thursday, threatening the EU with retaliation.