The legal chief of US optical networking supplier Infinera has launched a scathing attack on China’s financial backing of Huawei and ZTE.
In testimony to the US-China Economic and Security Review Commission, Michael McCarthy claims Huawei and ZTE benefit from sweeping government financial backing, and argues the US must act to ensure the optical networking market remains competitive. McCarthy believes Chinese state subsidies are already impacting the sector, and draws parallels to the US solar industry, which he claims has been decimated by Chinese rivals.
“China’s intentions are clear: they have announced their intention to intensify government support for the industry and to make their national champions world market leaders,” McCarthy states, adding. “Our response must be equally clear to ensure that competition in this vital sector is not based on which government is willing to lavish the most resources on its producers, but on the quality of our products, the strength of our innovation, and the productivity of our workers.”
McCarthy told the panel he was encouraged by reports that the European Commission may launch a major probe of Chinese government subsidies for telecom equipment, and potentially impose punitive tariffs on imports. He also pointed to Australia and Germany, which have excluded the Chinese vendors from key national infrastructure tenders due to security concerns – a factor the US government continues to probe.
Huawei and ZTE firmly deny unfairly benefiting from state subsidies.