EU to target Huawei and ZTE in trade subsidies action

28 May 2012

Huawei and ZTE, two of China’s biggest telecoms equipment makers, are to be the target of a major EU trade case alleging they benefited from illegal government subsidies.

The EU is alleging that the two companies obtained illegal subsidies that allowed them to sell products below cost in the European Union.

China is the EU’s second-largest trading partner after the US. However, it has been alleged that China is impacting on competition globally by subsidising a variety of industries.

In Europe, Huawei competes against Alcatel-Lucent, Ericsson and Nokia-Siemens.

If the European Union finds against Huawei and ZTE, the world’s No 2 and No 5 telecoms equipment makers respectively, they could face punitive tariffs.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years