Telecom firms deny subsidies allegations
Source: Agencies |
May 30, 2012, Wednesday
|
Print Edition
Print Edition
CHINA'S top telecoms gear makers Huawei and ZTE yesterday denied receiving illegal government subsidies that helped them undercut rivals in recent years.
The denials follow media reports that the European Union plans to take action over unfair trade practices.
Action by the EU could spark a trade war, analysts warned.
Cheap prices have allowed Huawei and ZTE Corp to grab a big share of the global network gear market in recent years, pushing firms such as Nokia Siemens Networks and Alcatel Lucent to the brink of extinction.
The Financial Times quoted unidentified EU officials and executives as saying the European Commission had been gathering evidence to show Huawei and ZTE had used subsidies to allow them to sell goods below cost in the EU.
A spokesman for EU trade chief Karel De Gucht said he could not confirm the contents of the FT report.
Both companies said yesterday that they had not been contacted by the EU.
"We deny claims made in the media that Huawei employs dumping practices and has benefited from illegal state subsidies," Huawei said in a statement.
ZTE said it "receives no illegal or hidden subsidies, nor does it dump products in any markets where it operates."
EU trade ministers are due to meet in Brussels tomorrow, an EU diplomat said.
"We think that though the ministers will have an informal debate over lunch on China, and they might touch on this topic, there will be no formal decision," he said.
"It's sensitive because there are some European firms in the Chinese market that might face consequences."
Action by the EU could be counterproductive.
"I don't think it'll be a very good move by the EU to launch an anti-dumping case," Yang Haofan, an analyst at Guotai Junan Securities in Shanghai, said.
"If that happens, European vendors such as Ericsson and Alcatel-Lucent will have problems trying to sell equipment in China, which is a bright spot of global telecom spending now."
Ericsson, the world's biggest seller of mobile equipment, said it did not support any EU move and had not prompted it to act.
Nokia Siemens Networks and Alcatel-Lucent declined to comment.
The denials follow media reports that the European Union plans to take action over unfair trade practices.
Action by the EU could spark a trade war, analysts warned.
Cheap prices have allowed Huawei and ZTE Corp to grab a big share of the global network gear market in recent years, pushing firms such as Nokia Siemens Networks and Alcatel Lucent to the brink of extinction.
The Financial Times quoted unidentified EU officials and executives as saying the European Commission had been gathering evidence to show Huawei and ZTE had used subsidies to allow them to sell goods below cost in the EU.
A spokesman for EU trade chief Karel De Gucht said he could not confirm the contents of the FT report.
Both companies said yesterday that they had not been contacted by the EU.
"We deny claims made in the media that Huawei employs dumping practices and has benefited from illegal state subsidies," Huawei said in a statement.
ZTE said it "receives no illegal or hidden subsidies, nor does it dump products in any markets where it operates."
EU trade ministers are due to meet in Brussels tomorrow, an EU diplomat said.
"We think that though the ministers will have an informal debate over lunch on China, and they might touch on this topic, there will be no formal decision," he said.
"It's sensitive because there are some European firms in the Chinese market that might face consequences."
Action by the EU could be counterproductive.
"I don't think it'll be a very good move by the EU to launch an anti-dumping case," Yang Haofan, an analyst at Guotai Junan Securities in Shanghai, said.
"If that happens, European vendors such as Ericsson and Alcatel-Lucent will have problems trying to sell equipment in China, which is a bright spot of global telecom spending now."
Ericsson, the world's biggest seller of mobile equipment, said it did not support any EU move and had not prompted it to act.
Nokia Siemens Networks and Alcatel-Lucent declined to comment.
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