This article is more than 1 year old

China gets free pass from EU commish as telco probe dropped

I'm scratching your back, Gao, now how about it for our guys?

The EU has decided to make friends with China despite earlier worries that it may have been giving an illegal boost to telco manufacturers.

On Monday, the European Commission decided to drop an investigation into alleged illegal subsidies and dumping of telecommunications equipment by Chinese exporters.

Following “intensive talks” between EU Trade Commissioner Karel De Gucht and China's minister of commerce Gao Hucheng that ended on Saturday, it was decided to officially abandon the one billion euro dispute.

Back in April, De Gucht announced he was no longer pursuing the EU’s investigation into the alleged dumping but kept open the anti-subsidy part of the investigation – essentially a probe into whether China had been giving illegal financial assistance to its own companies via tax credits, low interest rate loans from state-owned banks, or cheap electricity.

Although an independent body will be set up to monitor the Chinese and EU telecoms networks markets, the decision is basically a trade-off. In exchange for dropping the investigation, the Commission hopes to secure equal treatment for European firms in the Chinese telecommunication market.

Had it found China guilty of dumping or subsidies, the Commission could have imposed extra duties on imports from Chinese companies such as Huawei and ZTE. ®

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