China probing 'illegal EU subsidies'
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E-mail China.org.cn, May 30, 2012
With the European Union reportedly poised to launch trade cases against telecom equipment makers in China, accusing them of receiving subsidies, China is set to investigate if the EU is illegally subsidizing its industries, a source close to the matter told China Daily.
The industries include "agriculture, telecom equipment, wind energy, electrical and mechanical goods," and China has already "obtained sufficient evidence," according to the source, who requested anonymity.
The EU is set, according to a recent report by the Financial Times, to launch trade complaints and investigations against Chinese makers of mobile network equipment, including Huawei and ZTE, as soon as next month. The European Commission has got "very solid evidence" the report said, showing that they benefited from illegal government subsidies and had sold products in the EU below cost.
An official from the Ministry of Commerce said that China has not got any official confirmation from the EU on the matter.
The case would mark the first time that the commission has initiated a trade investigation of its own accord, rather than responded to formal complaints filed by companies or industry groups.
The European Commission said in March that it is considering imposing duties on made-in-China products to offset alleged subsidies.
The commission also said it believes that European companies are hesitant about asking the EU to take protective measures for fear that China will retaliate against their business interests.
Chinese companies denied they got illegal state subsidies.
ZTE said in a statement that the company did not receive illegal government subsidies or conduct dumping practices in Europe.
The EU joined the United States and Japan in March to file a case with the WTO questioning the quotas China places on exports of rare earths, the 17 elements used in a variety of high-tech industries.
The European Commission also proposed to revise its government procurement agreement to bar companies in certain countries, including China, from benefiting from that agreement.
China is becoming tougher on leveraging WTO rules to fend off hostile trade cases, said Zhou Shijian, senior trade expert from Tsinghua University.
Days after the US Commerce Department announced its preliminary decision on imposing anti-dumping tariffs of up to 250 percent on imports of Chinese solar cells, the Ministry of Commerce said last week that programs supporting renewable power, including wind and solar, in five US states violated WTO rules.
China also filed a complaint last week at the WTO over US measures for calculating anti-subsidy duties on 22 categories of Chinese exports.
The EU's move, if taken, would harm both sides, experts said.
China's telecom industry s deeply connected to the global market. Huawei and ZTE are both among the global top five telecom gear makers.
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