News Content

China, EU close to deal on telecom trade dispute over Beijing subsidies

CHINA and the EU appear to be close to settlement of a long-standing telecom dispute, that would end one of the most divisive problems between them, reports Reuters.

EU Trade Commissioner Karel De Gucht, who leaves office on October 31, is ready to drop a probe into subsidies to Chinese mobile telecom equipment maker if China makes concessions.

The two parties have reached a common understanding on all the four issues and they are looking to cut a deal," said someone close to the talks.

Another said Mr De Gucht wants to reach a deal before he leaves office. "He doesn't want to leave this with his successor," said the source, adding that Mr De Gucht has also been on the phone with Commerce Minister Gao Hucheng.

According to an EU document seen by Reuters, the Commission says Huawei's swift rise in the European telecoms equipment market, from a 2.5 per cent market share in 2006 to a 25 per cent share today, and this could only have been achieved with state aid, illegal under World Trade Organisation (WTO) rules.

Imports of such equipment into the EU are worth an annual EUR1 billion (US$1.3 billion) and have Chinese companies rival Ericssonn, Nokia Siemens Networks and Alcatel-Lucent.

Europe is China's most important trading partner and for the EU, China is second only to the United States. A successful telecom agreement could pave the way for a wider free-trade accord in the future, said Reuters.

Also, Chinese Premier Li Keqiang will meet senior EU officials at a summit in Milan on October 16-17 and is expected to discuss the problem. The European Commission declined official comment.