Original URL: http://www.theregister.co.uk/2013/05/15/eu_trade_commission_china_probe_launch/

Euro trade chief snaps on glove, goes it alone in Huawei, ZTE probe

But first, he'll have a little word with China

By Brid-Aine Parnell

Posted in Business, 15th May 2013 12:40 GMT

European Union trade chief Karel De Gucht will investigate allegations that Chinese telecoms hardware makers are undermining their Euro rivals.

The China-based electronics goliaths are accused of unfairly gaining an advantage by trousering state subsidies from the communist regime and dumping cheap networking kit on the European market.

Ordinarily the European Commission waits for companies to file a complaint before launching formal inquiries. But De Gucht has been pushing to open a probe on his own authority after facing a wall of silence from the Continent's telecoms gear manufacturers.

It was rumoured that Sweden's Ericsson, Finland's Nokia Siemens Networks and other firms refused to moan about Chinese firms Huawei and ZTE for fear of retribution in China's lucrative mobile market.

Last month, the trade commissioner struggled during a meeting to win support from EU trade ministers for his personal investigation. Swedish trade minister Ewa Björling, who opposed the probe, said at the time that most of Europe wasn't interested.

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

Nevertheless, De Gucht said in a statement to The Register that the EC had made the decision "in principle" to start the probe, although the commission planned to hold off until it had spoken to China.

"The European Commission has today taken a decision in principle to open an ex officio anti-dumping and an anti-subsidy investigation concerning imports of mobile telecommunications networks and their essential elements from China," he said.

"This decision will not be activated for the time being to allow for negotiations towards an amicable solution with the Chinese authorities."

The trade watchdog wing of the EC claimed last year that it had hard evidence that both Huawei and ZTE banked state subsidies to help them to undercut European firms, and had "dumped" their networking gear in Europe, selling it below cost to derail its rivals.

The investigation marks the first time the commission has launched a case off its own bat. ®