EU mulls probe into China telecom makers' biz practices

European Union trade chief Karel De Gucht is looking to raise support from other members within the European Commission to look into alleged unfair trade practices from Chinese telecom equipment makers.
Written by Kevin Kwang, Contributor

European Union (EU) trade chief Karel De Gucht is reportedly looking to seek support from European Commission members to look into supposed unfair trade practices by Chinese telecom equipment makers Huawei Technologies and ZTE. However, he faces opposition from European companies looking to grow their businesses in China.

A Wall Street Journal report Monday, citing an unnamed EU official, said De Gucht will broach the topic of having the necessary backing by EC members to look into alleged unfair trade practices by the Chinese companies during their weekly meetings on Wednesday.

Europe has been suspecting Huawei and ZTE are using subsidies from the Chinese government, such as cheap credit from state-owned banks, to sell their goods at unfairly low prices and snatch market share in the region, the report noted.

The unnamed source added De Gucht has not decided on whether to launch the probe, while European officials are also closely monitoring whether European telecom gear makers are winning business contracts in China during this time.

Ericsson, for one, opposed any such investigstion. Ulf Pehrsson, head of government and industry relations at Ericsson, told Wall Street Journal: "We don't believe in this type of unilateral measure. Ericsson is supporting global rules that apply for all industry players. The EU faces the risk of initiating a negative spiral by targeting individual firms."

The Swedish telecoms manufacturer clinched a deal to build a TD-LTE network for China Mobile Hong Kong, a subsidiary of China Mobile, last July.




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