China Warns of Tit-for-tat Action Over Anti-dumping Case by EU

In a tit-for-tat move, China warned that it will probe illegal EU subsidies to counter Brussels' reported decision to launch anti-dumping cases against Chinese telecom firms for receiving subsidies.

With the European Union reportedly poised to launch trade cases against telecom equipment makers in China, accusing them of getting subsidies, Beijing is investigating if the EU is actually illegally subsidising its industries, state-run China Daily reported.

The industries include "agriculture, telecom equipment, wind energy, electrical and mechanical goods", and China has already "obtained sufficient evidence," the source, who requested anonymity, said.

The remarks followed a recent report by the Financial Times that EU is set to launch trade complaints and investigations against Chinese makers of mobile network equipment, including Huawei and ZTE, as soon as next month.

An official from the Ministry of Commerce told China Daily that China has not got any official confirmation from the EU on the matter.

"If the report is correct, China will not put up with such trade protectionism," the official said.

For its part, Huawei strongly denied the allegation that it received government subsidies.

"We deny claims made in the media that Huawei employs dumping practices and has benefited from State subsidies. We also object to the investigation that the European Commission is reportedly launching on the basis of these claims," state-run Global Times quoted a Huawei statement as saying.

Sweden-based Ericsson, a major rival of Huawei, said on May 28, 2012 it is against the probe by the EU commission into Huawei and ZTE for the claim that they may be selling products in Europe below cost.

Ulf Pehrsson, head of Ericsson's government and industry relations, said, "Ericsson is a strong supporter of free trade and we don't believe in this type of unilateral measure," Global Times report said.

"With its rising industrial competitiveness driven by labour cost and R&D advantages and expanding global market share, China has increasingly become a target of trade complaints, especially at a time when the manufacturing industry is shrinking in the developed countries," Zhang Jianping, a researcher at the Academy of Macroeconomic Research under the National Development and Reform Commission, told the Global Times.