September 20, 2012 / 11:47 AM / 7 years ago

EU moving ahead with China telecom trade investigation

BRUSSELS, Sept 20 (Reuters) - EU Trade Commissioner Karel De Gucht is pressing ahead with a trade case against Chinese telecommunications companies despite an EU-China summit designed to ease tensions, a senior EU official said on Thursday.

The European Commission, which handles trade issues for the 27-nation European Union, has been considering taking action against telecoms gear makers Huawei and ZTE Corp , as it suspects they receive illegal state subsidies to undercut rivals in Europe.

A report in the Financial Times newspaper on Thursday stated that the EU had stalled the case on the eve of the summit with Chinese Premier Wen Jiabao in Brussels on Thursday meeting EU leaders.

They are to discuss trade and the euro zone financial crisis, as well as human rights and sustainable development.

A senior EU official rejected the newspaper report.

“EU Commissioner Karel De Gucht continues actively to gather evidence so as to be ready to launch a case as required,” the official said.

The two Chinese companies have denied receiving illegal subsidies.

“We are confident that we have not engaged in dumping in Europe,” Leo Sun, president of Huawei’s European affairs department, told Reuters. “They are welcome to come to China and take a look.”

The EU suspicion is that the Chinese makers’ low prices hurt European equipment suppliers such as Alcatel-Lucent and Nokia-Siemens Networks, which was formed by Nokia and Siemens.

The past few months have seen a flurry of activity between Brussels and Beijing, with a series of meetings as the two sides try to gauge the stance of the other.

Sun said that Huawei had exchanged views with the EU on the issues involved and had provided EU officials with data and evidence.

The Chinese telecoms case is a first for the Commission, as the EU executive is considering bringing the case on its own initiative instead of waiting for EU companies to make a formal complaint.

The new procedure would provide a shield for the European companies, who might otherwise fear retaliation in countries such as China. (Reporting by Sebastian Moffett; additional reporting by Kevin Yao; editing by Jason Neely)

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