updated 06:44 pm EDT, Tue May 29, 2012
Chinese companies push back against rumored EU action
Chinese telecom hardware manufacturers Huawei and ZTE have denied receiving any illegal subsidies from the government of China, Reuters reports today. The two cellphone makers have come under fire for alleged unfair trade practices and now are rumored to face impending punitive action from European Union regulators.
The EU's executive arm is said to have spent the last several months compiling evidence that Huawei and ZTE have received subsidies from the Chinese government. These subsidies, the regulators allege, have allowed the companies to sell their products for lower cost on the European market, making it more difficult for European technology firms to compete.
The EU is expected to come forth with its findings and recommendations for action in the coming weeks. The case marks the first time that the EU's executive arm has taken such action without prompting from a trade group or private company.
Both companies have denied the accusations to the press. ZTE says it receives "no illegal or hidden subsidies" and does not "dump products" in markets where it operates. Huawei has also categorically denied dumping products and receiving state subsidies.
The case was opened by EU regulators of their own volition, but a number of European tech manufacturers have expressed concerns over the possibility of reprisals in the Chinese market. It is thought by some that punitive actions taken on the part of the EU could lead to difficulties for western companies looking to make deals and expand in China.