NEW YORK — Europe's top trade official for the first time late on Friday officially cited Chinese mobile telecommunications equipment makers Huawei and ZTE Corp for violating anti-dumping and anti-subsidy guidelines. European Union Trade Commissioner Karel De Gucht said he was prepared to launch a formal investigation into anti-competitive behavior by these Chinese companies in order to protect a "strategic" sector of Europe's economy. "Huawei and ZTE are dumping their products on the European market," De Gucht told Reuters in an exclusive interview before engaging with US businesses as part of his preparations for negotiating a TransAtlantic free trade pact with the United States. Those talks are expected to begin in July. An investigation now into sales practices of Chinese telecoms equipment companies would open up a new front in a multibillion-euro trade offensive against a critical partner. The EU is China's most important trading partner, while for the EU, China is second only to the United States. Chinese exports of goods to the 27-member bloc totaled 290 billion euros ($372 billion) last year, with 144 billion euros going the other way. Cheap capital for these Chinese companies "creates a distorted playing field and that is what this is about," De Gucht said, referring to Huawei and ZTE, respectively the world's No. 2 and No. 5 telecom equipment makers. In the past both Huawei and ZTE deny benefiting from illegal state support. De Gucht's office on Wednesday said an investigation was prepared but put on hold. At the time no companies were officially named. The pause is to allow further negotiations with China in hopes for a resolution. – Reuters
