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Euro states stick fingers in ears to Huawei, ZTE tech 'dump' claims

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A number of EU countries aren't keen on backing the European Commission's bid for a formal investigation of Chinese telecoms manufacturers Huawei and ZTE, Sweden has said.

The commission's trade watchdog has been collecting evidence on alleged subsidies and "dumping" - selling products below cost to undercut European rivals - from the Chinese firms, which have both denied the allegations.

To make the probe official, the commission usually needs a complaint from a European company, but European hardware manufacturers such as Ericsson, Alcatel Lucent and Nokia Siemens Networks aren't interested in moaning about the firms for fear of retaliation in the potentially lucrative Chinese market, sources have whispered.

Top trade official Karel de Gucht told a news conference in Dublin that he had brought up the issue at a meeting of EU trade ministers, a move that had been rumoured before the meeting, but he wouldn't elaborate on the outcome of the discussion.

Swedish Trade Minister Ewa Bjorling told Reuters that most of the ministers said they weren't going to support the launch of a formal investigation.

"Not all member states spoke out, but of those that spoke, a majority was for our position," she said.

One unnamed trade diplomat said that only four out of the 27 EU member states were in favour of a probe and that did not include the EU's largest economy, Germany.

The commission could still push ahead with the investigation, but it's the individual countries that decide whether or not to punish firms for subsidies or dumping.

Both the US and Australia have more or less closed their doors to Chinese telecoms equipment makers, citing security concerns over having communications networks potentially linked to state-backed companies.

Huawei and ZTE have always denied that they're receiving state subisidies from China and said the security concerns are ridiculous, considering most telco gear is made in China no matter what company's name is on the box.

China's ambassador to the EU, Wu Hailong, said in Brussels that China was concerned about the escalating trade frictions between the two regions.

"The EU side has been frequently resorting to trade remedy measures to restrict access of Chinese products to the EU market," he said. "The negative practice is counterproductive to the sound, sustained and stable development of China-EU trade relations." ®

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