Brussels, 10/12/2012 (Agence Europe) - The EU27 are to decide on what to do next in the Commission's investigation into alleged dumping by the Chinese companies ZTE and Huawei.
According to an internal document of the European executive, published by the Wall Street Journal on 7 December, the investigation carried out by the services of DG Trade concludes that the two Chinese telecoms equipment manufacturers sold mobile network equipment at prices 35% lower than market prices, harming European companies. These knock-down prices were made possible by the preferential financial support of the Chinese government via its State banks. As recently as last week, ZTE was granted a credit line of $20 billion by the Chinese Development Bank.
This document is currently being scrutinised by the trade experts of the member states, who are to decide whether the Commission should undertake risky legal action. In the view of the analysts, European action could lead to a wave of tit-for-tat measures by the Chinese government.
In a movement aiming to toughen the capacity of the European response to unfair practices by emerging countries which shore up their economic development with State capitalism, Commissioner Karel De Gucht suggested in May that the Commission, in the framework of a more modern trade defence arsenal, should be allowed to launch investigations and complaints on its own initiative instead of that of the companies whose products are targeted by antidumping measures. Taking action against ZTE and Huawei would be the first example of this, as the investigation carried out by the Commission was not based on complaints by European equipment manufacturers, which are worried that they could end up being kept out of the booming Chinese telecoms market.
The Belgian producer of 3G keys, Option Wireless, had previously complained about the dumping of the two Chinese equipment manufacturers. The case was resolved in late 2010 with the signature of a technical cooperation agreement with Huawei.
Huawei is the world's second largest producer of telecoms equipment, behind Sweden's Ericsson, ZTE taking fifth place behind Nokia Siemens Networks of Finland and France's Alcatel-Lucent.
Under the threat of antidumping and anti-subsidy investigations in Europe, Huawei and ZTE are also suspected of undermining security in North America. (see EUROPE 10708). (EH/transl.fl)