EU demanding China raise telecom prices: report

By Song Shengxia Source:Global Times Published: 2013-2-1 1:03:01

The European Union (EU) has reportedly been demanding that Chinese telecom companies raise the prices of their exports to Europe and that European firms be given a share of China's telecommunications market in return for dropping an EU investigation.

Trade experts have said they regard these demands as unreasonable and said they would risk escalating a trade war that no party could win.

EU Trade Commissioner Karel De Gucht asked China to provide a 30 percent share of its telecommunication market in return for dropping an EU investigation against Huawei and ZTE Corporation, the Financial Times (FT) reported Wednesday. 

Gucht also asked that Huawei and ZTE lift the prices of their products exported to the EU by 29 percent as part of the agreement, the report said.

"Asking Chinese companies to raise the price of their exports to Europe is nothing more than an attempt to drive them out of the European market," Bai Ming, a researcher with the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce, told the Global Times Thursday.

The European Commission confirmed with the Global Times Thursday that trade officials from China and the EU will meet in Brussels Friday in an effort to resolve a potential trade case against Huawei and ZTE. But it declined to comment on the FT report.

The European Commission has been holding talks with their Chinese counterparts for more than six months in order to find a solution to the trade case, John Clancy, the spokesperson for Gucht, said in a statement sent to the Global Times Thursday.

In another statement sent to the Global Times Thursday, Huawei said that innovation is the driving force powering the company's sustainable development rather than prices.

ZTE also said in a statement that the company wins market trust with innovative technologies, tailor-made products and quality service, without commenting on the FT report.

The European Commission is investigating allegations that Huawei and ZTE are receiving government subsidies, which allow them to sell their products at low prices in Europe. Both Huawei and ZTE denied the allegations.

"China committed to opening up its market gradually upon entering the WTO. It has already opened up more than 100 sectors out of 160 and will continue to honor the commitment. Any pressure on China at this stage can result in nothing except risk triggering trade wars," He Weiwen, co-director of the China-US-EU Study Center under the China Association of International Trade, told the Global Times.

The Ministry of Commerce and the Ministry of Industry and Information Technology hadn't replied to Global Times queries as of press time.

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