EU Close to Decision on Chinese State Subsidy Investigation into Huawei and ZTE

Published on: 18th Dec 2012

?The European Union is expected to decide if it is to take action against China's Huawei and ZTE within the next few weeks.

EU trade commissioner Karel De Gucht confirmed that the authorities are looking at whether it should open a formal investigation into the two companies after completing an informal review of the evidence.

The commission is continuing to gather information for a possible investigation while also discussing its concerns with Chinese authorities, Mr. De Gucht said in an interview with the Wall Street Journal.

"We have already had discussions about the issue with the Chinese authorities, not directly about the companies themselves, but about the financial constructs that make us have doubts about the level playing field in this sector." he said.

There have been suspicions that the two companies benefit from state-subsidies particularly in the form of generous bank loans from state-controlled banks which can be used to secure infrastructure sales with mobile networks.

"ZTE does not receive illegal or hidden subsidies, nor does it dump products in any markets where it operates," ZTE said in a statement.

Huawei also said that "We understand the global economic downturn is having a serious impact on our colleagues both in China and EU, but protectionism and state support cannot be the answer."

Regardless of the matter, some European politicians have been wary of targetting the two Chinese firms lest such action results in European suppliers being locked out of the lucrative Chinese market in return.

On the web: Wall Street Journal

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Tags: [huawei]? [zte]?

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