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

Stocks

   

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)

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

  • Most Popular
  • Most Shared

Market Eye

Sensex, Nifty rise to second consecutive record high

Sensex, Nifty rise to second consecutive record high

The BSE Sensex and Nifty on Friday rose to their second consecutive record highs. The 30-share Sensex surged as much as 1.52 percent to an all-time high of 27,762.13. The broader Nifty gained as much as 1.49 percent to a record of 8,291.65.  Full Article 

REUTERS SHOWCASE

Ban on E-Cigs?

Ban on E-Cigs?

Govt considers ban on e-cigarettes, sale of single smokes.  Full Article 

Commodities

Commodities

Silver futures in India hit four-year low on global cues.  Full Article 

BOJ Policy

BOJ Policy

BOJ shocks markets with surprise easing as inflation slows.  Full Article 

Cost Cutting

Cost Cutting

PM Narendra Modi boots officials out of the first class cabin  Full Article 

Leisure Riding

Leisure Riding

Harley-Davidson woos affluent young Indians with bike culture  Full Article 

Shadow Banking

Shadow Banking

China's shadow banking sector growing rapidly, third largest in world - FSB.  Full Article 

Moody's on India

Moody's on India

Moody's welcomes India's policy steps, but wants to see more.  Full Article 

Reuters India Mobile

Reuters India Mobile

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