China Threatens Retaliation for EU Telecom Probe

China stepped up its rhetoric against the European Union on Thursday, after threatened to open anti-dumping investigations into Chinese telecom equipment suppliers and . From Paul Mozur and Wayne Ma of The Wall Street Journal:

Chinese Premier Li Keqiang said during a meeting with the Greek Prime Minister that Beijing is closely monitoring EU investigations into China’s solar-panel and wireless-network products, according to state television. Mr. Li also called for Greece to try to persuade the EU to use caution in applying any trade measures.

At a news conference also on Thursday, Shen Danyang, a spokesman for China’s Ministry of Commerce, said China would take necessary measures to defend its mobile- equipment companies against any sanctions taken by the EU.

Mr. Shen also said new tariffs on Chinese solar manufacturers, which are set to be announced next month, were akin to “picking up a stone to drop on one’s foot.”

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The EU claims that Huawei and ZTE receive from the Chinese government that enable the companies to sell products below cost and gain market share on global competitors, practices that both companies have denied. From The China Daily:

Huawei, the world’s second-largest telecom equipment maker by revenue, said in a statement: “Huawei is disappointed that the European Commission has taken the unprecedented step of deciding in principle to open the first ever ex-officio dumping and subsidy investigations.”

The company said it always plays fair and wins business and trust through innovative technology and quality service, rather than via pricing or subsidies.

Dai Shu, a spokesman for ZTE, said his company has yet to receive any official letter from the EU and insisted it receives no illegal subsidies to do business in the region.

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The Commerce Ministry spokesman added that China had made a recent proposal about the telecoms situation to an EU delegation but had not received a response, according to Reuters:

“This makes one cast doubt on the sincerity of the EU to resolve conflicts through consultations,” Shen said.

EU officials said on Wednesday they have had an open-door policy to the Chinese authorities for more than a year at China’s own request, but that the response had been disappointing so far.

“As we made clear yesterday, the European Commission counts on our Chinese partners to take up the offer of negotiations in a serious manner to find an amicable solution to resolve this situation,” EU trade spokesman John Clancy told Reuters on Thursday.

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