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September 21, 2012

EU to Move Forward with Investigation of Chinese Telecoms

By Oliver VanDervoort, Contributing Writer

Every now and then, we run across subtle reminders that the technology business is a truly competitive and cutthroat world. The telecom world is just a part of that bigger feuding section of the business community and the feuding gets even more cut throat when governments who do not exactly trust each other get involved. 

Such is the situation involving the European Union and China. EU Trade Commissioner Karel De Gucht is allowing the trade commission to move ahead with an investigation into a trade case involving two of the most powerful Chinese telecom companies.

The investigation into ZTECorp. and Huawei will not move forward despite the fact that an international trade summit had been called as an attempt to defuse tensions that had arisen between the European Union and China. At the heart of the dispute is the EU’s assertion that ZTE (News - Alert) and Huawei have been receiving illegal state subsidies from China as part of a scheme to undercut other telecoms in the European Union.

The European Union had actually stalled the investigation due to the summit with China that will actually involve issues that are quite larger than a telecom dispute. The two powers are expected to be talking about the current worldwide financial crisis as well as human rights and a host of other topics. Meanwhile, the two Chinese telecoms are claiming their innocence.

"We are confident that we have not engaged in dumping in Europe," Leo Sun, president of Huawei's (News - Alert) European affairs department, told Reuters (News - Alert). "They are welcome to come to China and take a look."

The EU claims that the low prices the two companies are able to offer are hurting European tech companies such as Alcatel Lucent (News - Alert) and Nokia Siemens. The two sides have spent the last few months going back and forth, hurling allegations and denials. The investigation means a more official look that could further intensify tensions.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2012, taking place Oct. 2-5, in Austin, TX. Stay in touch with everything happening at ITEXPO (News - Alert). Follow us on Twitter.

Edited by Brooke Neuman
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