China threatens own trade action if EU opens telecoms case

BRUSSELS Thu May 16, 2013 10:36pm IST

A paramilitary policeman stands guard at the entrance to the European Union embassy in central Beijing December 13, 2011. REUTERS/David Gray/Files

A paramilitary policeman stands guard at the entrance to the European Union embassy in central Beijing December 13, 2011.

Credit: Reuters/David Gray/Files

Related Topics



BRUSSELS (Reuters) - China threatened on Thursday to retaliate if the European Union formally opens an investigation into alleged anti-competitive behaviour by Chinese mobile telecom equipment companies.

European Trade Commissioner Karel De Gucht said on Wednesday he and fellow commissioners had agreed in principle to open an anti-dumping and anti-subsidy case against China, but would first seek to negotiate a solution with Chinese authorities.

Although not mentioned in the statement, EU officials told Reuters the primary targets of the investigation would be world No. 2 telecoms equipment maker Huawei and smaller Chinese company ZTE.

"If the European side insists on opening an investigation, the Chinese side will according to WTO rules and Chinese law take firm measures to safeguard its legitimate rights and interests, and the consequences must be borne by the party provoking the friction," Chinese Ministry of Commerce spokesman Shen Danyang told reporters in Beijing.

The case would be the first to be launched without a complaint by European companies, but rather by the Commission itself.

Manufacturers such as Ericsson(ERICb.ST), Nokia Siemens Networks(NOK1V.HE) (SIEGn.DE) and Alcatel-Lucent(ALUA.PA) have suffered as a result of cheap Asian imports but will not make formal complaints for fear of Chinese reprisals, which has made it hard for the Commission to gather evidence.

Shen said Beijing had taken note of De Gucht's statement through media reports and that communications between the EU and the Chinese side were "smooth and open".

He said China had made a proposal over the telecoms matter to the European Commission during a recent visit by an EU delegation to China, but had still not received any response.

"This makes one cast doubt on the sincerity of the EU to resolve conflicts through consultations," Shen said.

EU officials said on Wednesday they have had an open-door policy to the Chinese authorities for more than a year at China's own request, but that the response had been disappointing so far.

"As we made clear yesterday, the European Commission counts on our Chinese partners to take up the offer of negotiations in a serious manner to find an amicable solution to resolve this situation," EU trade spokesman John Clancy told Reuters on Thursday.

Officials also said they now had proof of Chinese subsidies, but both Huawei and ZTE deny benefiting from illegal state support. Huawei also denied it was selling telecoms equipment below cost to secure market share.

"I think that the EU in the end does not want to make a big fuss about this," a Chinese diplomat told Reuters, saying the 27-member bloc would negotiate rather than carry through with its threat.

"If tariffs are levelled on Chinese products it will not only harm the interests of Chinese industry but also the European Union. It is like cutting one finger will hurt the whole hand," the diplomat said.

(Editing by Louise Ireland and Rex Merrifield, Ron Askew)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared
Sensex surges nearly 400 points on energy reform, state elections

Sensex surges nearly 300 points on energy reforms, state elections

The BSE Sensex surges nearly 300 points and the Nifty gains 90 points after the government's energy reforms lead to a rally in energy firms, while wins by Prime Minister Narendra Modi's party in two state elections raise expectations for additional reforms.  Full Article 


Indian State Media

Indian State Media

Controlling the message: Modi chooses state media  Full Article 

Asian Markets

Asian Markets

Japanese stocks lead sharp Asia rebound as U.S. data reassures   Full Article 

Gold Curbs

Gold Curbs

Finance Ministry wants to reimpose curbs on gold imports - ET  Full Article 

Eyeing Reebok

Eyeing Reebok

Investor group aims to buy Reebok unit - WSJ  Full Article 

Gold Lower

Gold Lower

Gold eases as dollar, equities recover on strong U.S. data  Full Article 

Health Check

Health Check

Credibility meets compromise in Europe's bank stress test.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage