EC, China face off on subsidies

The trade dispute between the EU and China over telecom equipment could be coming to a head, and threatens to escalate into a trade war.
 
Chinese and EU trade officials met in Brussels on Friday to try to resolve their issues before the EC follows through with threats to file a major trade case accusing China of offering illegal subsidies to Huawei and ZTE.
 
Ahead of the meeting, Chinese diplomats filed a formal complaint alleging that EU trade commissioner Karel De Gucht had made several unreasonable demands on China in exchange for agreeing to drop the case, Financial Times reported last week.
 
The report, which was subsequently picked up by Chinese media, claims De Gucht demanded EU vendors be given a 30% share of China's telecom market. He also allegedly insisted that Huawei and ZTE be made to raise their export prices by 29%.
 
While FT has quoted an unnamed EU official as stating that the Chinese diplomats' account of the meeting with De Gucht is inaccurate, on the record, the EC is staying quiet about the report.
 
EC and Chinese officials have met multiple times in the last six months to try to hammer out a settlement in this case – Friday's meeting was the latest round of negotiations.
 
The dispute coincides with a major trade case opened by the EC, alleging price dumping and illegal subsidies in China's solar panel manufacturing sector.

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