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

Multimedia Social Media Documenting, Not Driving, Hong Kong Protests

Unlike Arab Spring uprisings, pro-democracy protestors in Hong Kong aren't relying on Twitter and Facebook to organize, but social media still plays a role More

Analysis: Occupy Central Not Exactly Hong Kong’s Tiananmen

VOA's former Hong Kong, Beijing correspondent compares and contrasts 1989 Tiananmen Square protest with what is now happening in Hong Kong More

Bambari Hospital a Lone Place of Help in Violence-Plagued CAR

Only establishment still functioning in CAR's second city is main hospital 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.
The Legacy of Jimmy Carter: The Preacher from Plainsi
X
October 01, 2014 10:45 AM
It is common in the United States to see tourists flock to sites associated with America's presidents. Some are privately owned and others are run by the National Park Service or the National Archives -- but most have helped draw business and people into the towns and cities where they are located. As VOA’s Kane Farabaugh reports, there is one particular presidential hometown that is unique in what it has to offer those who make the trip.
Video

Video The Legacy of Jimmy Carter: The Preacher from Plains

It is common in the United States to see tourists flock to sites associated with America's presidents. Some are privately owned and others are run by the National Park Service or the National Archives -- but most have helped draw business and people into the towns and cities where they are located. As VOA’s Kane Farabaugh reports, there is one particular presidential hometown that is unique in what it has to offer those who make the trip.
Video

Video Hong Kong Protests Draw New Supporters on National Holiday

On the 65th anniversary of the founding of Communist China, Hong Kong protesters are hoping to stage the largest pro-democracy demonstration since the 1989 Tiananmen protests. VOA's Brian Padden visited one of the protest sites mid-day, when the atmosphere was calm and where the supporters were enthusiastic about joining what they are calling the umbrella revolution.
Video

Video India's PM Continues First US Visit

India's prime minister is on his first visit to Washington, to strengthen political and economic ties between the world's oldest and the world biggest democracies. He came to the U.S. capital from New York, the first stop on his five-day visit to the country that denied him an entry visa in the past. From Washington, Zlatica Hoke reports Modi seemed most focused on attracting foreign investment and trade to increase job opportunities for his people.
Video

Video Malaysia Struggles to Stop People Joining Jihad

Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Could US Have Done More to Stop Rise of Islamic State?

President Obama says airstrikes against Islamic State militants in Syria will likely continue for some time because, in his words, "there is a cancer that has grown for too long." So what if President Obama had acted sooner in Syria to arm more-moderate opponents of both the Islamic State and the Syrian government? VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video Treasure Hunters Seek 'Hidden Treasure' in Central Kenya

Could a cave in a small village in central Kenya be the site of buried treasure? A rumor of riches, left behind by colonialists, has some residents dreaming of wealth, while others see it as a dangerous hoax. VOA's Gabe Joselow has the story.
Video

Video Ebola Patients Find No Treatment at Sierra Leone Holding Center

At a holding facility in Makeni, central Sierra Leone, dozens of sick people sit on the floor in an empty university building. They wait in filthy conditions. It's a 16-hour drive by ambulance to Kailahun Ebola treatment center. Adam Bailes was there and reports on what he says are some of the worst situations he has seen since the beginning of this Ebola outbreak. And he says it appears case numbers may already be far worse than authorities acknowledge.
Video

Video Identifying Bodies Found in Texas Border Region

Thousands of immigrants have died after crossing the border from Mexico into remote areas of the southwestern United States in recent years. Local officials in south Texas alone have found hundreds of unidentified bodies and buried them in mass graves in local cemeteries. Now an anthropologist and her students at Baylor University have been exhuming bodies and looking for clues to identify them. VOA’s Greg Flakus has more from Waco, Texas.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid

World Currencies

EUR
USD
0.7866
JPY
USD
109.25
GBP
USD
0.6139
CAD
USD
1.1120
INR
USD
61.428

Rates may not be current.