Report: EU trade chief pushes for investigation of Huawei, ZTE

Concerns over possible state subsidies and security threats have prompted the European Union's trade commissioner to seek the backing of EU states to investigate Chinese equipment vendors Huawei and ZTE, according to a Reuters report. The report cited unnamed EU diplomats.

The move is unusual as EU trade investigations normally begin with a company complaint. However, Reuters cited people familiar with the matter as saying that Ericsson, Alcatel-Lucent and Nokia Siemens Networks have refused to cooperate with the European Commission because of fears that they could be shut out of the growing Chinese telecoms market in retaliation.

Huawei and ZTE have each denied receiving unfair subsidies from the Chinese government. They maintain that they comply with international laws and that attacks against them over the security of their products or accusations of ties to the Chinese government and military are politically motivated. 

In spite of the lack of complaints from European manufacturers, EU Trade Commissioner Karel De Gucht will sound out EU trade ministers on the issue at a meeting in Dublin this week, the unnamed EU diplomats told Reuters.

De Gucht is said to support taking a tough stance with the Chinese telecoms equipment manufacturers over concerns that they are able to undercut European manufacturers due to state subsidies. Their increasing dominance of mobile networks is also seen as a threat to security, Reuters said.

Huawei recently won a major LTE deal from Wind in Italy, and is set to share the €1 billion value of the deal with Italian manufacturer Sirti.

Huawei plans to hire 5,500 people in Europe in the next four to five years, bringing its local workforce to 13,000, according to acting CEO and Deputy Chairman Ken Hu. "In the past 10 years we've achieved a deep understanding of Europe," Hu told reporters in Paris, speaking through a translator, according to Bloomberg. "We now have local partners, research and development facilities. We will continue to increase our investments in this market. If we can be successful in Europe and have a virtuous circle, we can invest more."

For more:
- see this Reuters article
- see this Bloomberg article

Related Articles:
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Report: EU risks trade war with China after demanding greater telecom share
EU ducks telecom trade war with China
ZTE share price slumps over EU/China trade war worries
China rejects allegation of dumping by Huawei and ZTE
Huawei rejects EU dumping allegations in trade probe

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