EU takes action on Chinese subsidies

The EU has given the first sign it could act to stop imports of Chinese data modems, by levying its first anti-subsidy tariffs on any of the country’s industries.
 
Chinese paper manufacturers now face higher import duties and anti-dumping tariffs after a 15 month investigation concluded they benefit from government subsidies in the form of cheap loans and land deals.
 
The decision opens the door to a fresh probe of data modem imports by Huawei and ZTE, which first came under scrutiny in September when Belgian manufacturer Option complained the pair were dumping wireless broadband dongles into the market at artificially low prices.
 
While Option subsequently dropped its complaint after agreeing a technology alliance with Huawei, the baton was taken up by German firm 4G Systems, which claims it has lost significant customers as shipments of WWAN modules from China increase.
 
While the EC closed the investigations in February, the paper industry case could prompt fresh scrutiny of Huawei and ZTE, which now threaten European vendors in terms of global business clout.
 
The initial investigation found that both vendors benefit from massive government credit lines, including a $25 billion (€17.7 billion) loan to ZTE in 2009 that far exceeded its $8 billion in revenue, and a $30 billion credit line for Huawei.

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