News / Economy

EU Concerned About Chinese Subsidies to Telecom Makers

A man looks at a Huawei mobile phone as he shops at an electronic market in Shanghai, Jan. 22, 2013.A man looks at a Huawei mobile phone as he shops at an electronic market in Shanghai, Jan. 22, 2013.
x
A man looks at a Huawei mobile phone as he shops at an electronic market in Shanghai, Jan. 22, 2013.
A man looks at a Huawei mobile phone as he shops at an electronic market in Shanghai, Jan. 22, 2013.
Reuters
The European Commission plans to send a formal warning to China that it is ready to levy sanctions against telecom equipment makers Huawei and ZTE Corp over illegal subsidies, people close to the matter said.

EU trade chief Karel De Gucht is set to win support from the bloc's executive on Wednesday to send the warning letter and show China's new president, Xi Jinping, that Brussels is serious about countering what it says is state support.

“We want to send a warning to the Chinese, a letter of intent that if they don't change their practices, there will be duties,'' said one person involved, adding that De Gucht had the full backing of European Commission President Jose Manuel Barroso.

The decision will mark an intensification of the European Union's efforts to guard against what Brussels says is dumping by China, the EU's second-largest trading partner. From June, the Commission will also levy duties on billions of dollars of solar panels from China, EU officials have told Reuters.

Huawei was a little-known telecom firm less than a decade ago, but today, along with its smaller rival ZTE , it holds almost a quarter of the European market.

That poses a security risk, the Commission says, because European industries ranging from healthcare to water utilities are becoming reliant on cheaper Chinese wireless technology.

An internal EU report last year recommended that the 27-member bloc should take action against Chinese telecommunications equipment makers as their increasing dominance of mobile networks made them a threat to security, as well as to home-grown companies.

Collecting evidence
A Huawei spokeswoman in Brussels declined to comment on the move, but the company denies receiving unfair subsidies. It says its advantages are due to low-cost manufacturing and that its products are secure. There was no comment ZTE on Tuesday, but it also denies allegations of illegal subsidies.

De Gucht told Reuters in February there were serious concerns about China's growing presence in mobile telecoms networks, noting that the United States and Australia had effectively shut Huawei out of their markets.

Last year, Germany excluded Huawei from supplying the infrastructure for a national academic research network.

European manufacturers Ericsson, Alcatel-Lucent and Nokia Siemens Networks fear retaliation in China, however, if they push to launch an anti-subsidy case, so the Commission has been collecting evidence on Huawei and ZTE with a view to launching a case on its own initiative.

Division between EU countries over the telecoms issue meant De Gucht has trodden cautiously. Britain and the Netherlands have embraced Huawei as a major job provider, while France and Italy have been backing De Gucht on going ahead with sanctions.

Officials say they now have proof of Chinese subsidies.

“This is a political decision tomorrow,'' said another person briefed on the Commission's thinking. “It's basically saying, we have all the evidence we need, we don't need to launch an investigation,'' the person said.

The Huawei spokeswoman noted that the company had offered several times to meet the European Commission, but was rebuffed.

“We are open to talking with stakeholders. Because there are allegations, there are misunderstandings and misperceptions, that's why we are always keen to discuss with all the stakeholders,'' said Tina Tsai.

You May Like

Turkey's Controversial Reform Bill Giving Investors Jitters

Homeland security reform bill will give police new powers in search, seizure, detention and arrests, while restricting the rights of suspects, their attorneys More

Audio Slideshow In Kenyan Prison, Good Grades Are Path to Freedom

Some inmates who get high marks could see their sentences commuted to non-custodial status More

'Rumble in the Jungle' Turns 40

'The Champ' knocked Foreman out to regain crown he had lost 7 years earlier when US government accused him of draft-dodging and boxing officials revoked his license More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Victorious Secularists Face Challenge to Form Government in Tunisiai
X
Henry Ridgwell
October 30, 2014 11:39 PM
Official results from Tunisia show the Islamist Ennahda party has failed to win the second free election since the so-called "Arab Spring" uprising in 2011. Ennahda, which handed power to a government of technocrats pending the elections, lost out to the secular party Nidaa Tounes. Henry Ridgwell reports from London that the relatively peaceful poll offers some hope in a volatile region.
Video

Video Victorious Secularists Face Challenge to Form Government in Tunisia

Official results from Tunisia show the Islamist Ennahda party has failed to win the second free election since the so-called "Arab Spring" uprising in 2011. Ennahda, which handed power to a government of technocrats pending the elections, lost out to the secular party Nidaa Tounes. Henry Ridgwell reports from London that the relatively peaceful poll offers some hope in a volatile region.
Video

Video Africa Tells its Story Through Fashion

In Africa, Fashion Week is a riot of colors, shapes, patterns and fabrics - against the backdrop of its ongoing struggle between nature and its fast-growing urban edge. How do these ideas translate into needle and thread? VOA’s Anita Powell visited this year’s Mercedes Benz Fashion Week Africa in Johannesburg to find out.
Video

Video Smugglers Offer Cheap Passage From Turkey to Syria

Smugglers in Turkey offer a relatively cheap passage across the border into Syria. Ankara has stepped up efforts to stem the flow of foreign fighters who want to join Islamic State militants fighting for control of the Syrian border city of Kobani. But porous borders and border guards who can be bribed make illegal border crossings quite easy. Zlatica Hoke has more.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.

All About America

AppleAndroid

World Currencies

EUR
USD
0.7893
JPY
USD
107.68
GBP
USD
0.6238
CAD
USD
1.1214
INR
USD
61.185

Rates may not be current.