Chinese Officials Concerned About EU Investigation into Huawei and ZTE
Chinese officials have expressed concerns about a European investigation into Huawei and ZTE concerning allegations of illegal state subsidies for the two telecoms companies.
The European Commission's Trade Commissioner Karel De Gucht has been heading an investigation into the two companies prior to a possible formal anti-dumping or anti-subsidy case against the companies.
An unnamed, but senior official from the European Commission has now told Reuters that Chinese officials had expressed concern about the possible investigation.
"Discussions have taken place on issues of trade defence between the two sides, including this issue and other potential irritants," the official said.
It's not expected that any decision on launching a case against the two companies wont be taken until the middle of next year, at the earliest. The Commission is said to have "very sold evidence" that the two companies had been able to sell goods below cost in Europe due to the state subsidies. Such dumping activity is banned under World Trade Organisation rules, which China is party to.
Both companies have long denied receiving any form of state-aid, although Chinese banks are particularly generous in financing vendor loans for clients of the two firms.
Last year a report was said to have found evidence of "significant Chinese government support" for both Huawei and ZTE, including "massive" lines of credit from state-controlled banks.
ZTE's lines of credit amount to US$25 billion, which is said to be exceptionally high for a company with annual sales of US$8 billion. Huawei is also understood to have benefited from large credit lines, including a $30 billion facility from China Development Bank.
On the web: Reuters