Brussels, 11/10/2012 (Agence Europe) - Under the threat of anti-dumping and anti-subsidy measures from the EU, Chinese companies Huawei and ZTE are suspected of damaging security in the United States.
The unveiling this week of a draft report by the intelligence committee at the United States Congress on trading relations between the US and Chinese telecoms network equipment manufacturers ZTE and Huawei suggesting they should be prevented from doing business in the US is controversial and is adding to concerns about the two mammoth Chinese companies. The report is based on nearly a year of investigations. It warns that Huawei and ZTE's technology can be used to undermine security in the United States. The intelligence committee says it can have no guarantee that the two Chinese telecoms companies are genuinely independent of the Chinese government, as they claim, and the committee says that it has credible statements about corruption and patent violations. The report recommends that Huawei and ZTE be banned from signing any new contracts or making merges and acquisitions in the US.
Concerns have been flooding in about the two companies. Reuters reported on Thursday 10 October that Canada has concerns about Huawei's involvement in a public contract for secure government telecoms.
Huawei is the world's second biggest telecoms company after Sweden's Ericsson, followed by Nokia Siemens of Finland, Alcatel-Lucent of France and ZTE of China.
The two Chinese companies are not flavour of the month in North America or Australia, but are gaining business around the world with their rock-bottom prices. Europe is suspicious and is threatening to issue anti-dumping and anti-subsidy measures against both ZTE and Huawei, but has postponed the measures for the moment due to lack of solid evidence.
In a move to beef up the EU's response to unfair trading practices by emerging economies based on state capitalism, EU Trade Commissioner Karel De Gucht suggested in May this year that the European Commission should be allowed to launch investigations and complaints on its own initiative rather than having to wait for companies to complain (which run the risk of reprisals and seeing foreign markets issue anti-dumping measures against them). Taking action against ZTE and Huawei could be a first in this connection.
Several industrial and diplomatic sources quoted in the press talk about no action being taken against the two Chinese companies until the summer of 2013 in order for the European Commission to have time to gather evidence and the fact that no EU manufacturers want to run the risk of complaining about the Chinese for fear of being kept out of the booming Chinese telecoms market. (EH/transl.fl)