EU to investigate Huawei, ZTE

The EU is dialing up the pressure on China's largest telecom-equipment companies, threatening a potential investigation into non-competitive behavior. The investigation would target the world's second and fifth largest telecommunications parts companies Huawei and ZTE corporation.

The European Commission has confirmed that it is ready to begin an investigation into allegations of uncompetative behavior by Chinese telecommunications firms including Huawei and ZTE Corp. A commission spokesman said on Wednesday that after a year of gathering evidence, Brussels is poised to launch an antidumping and anti-subsidy case.

The spokesman insisted EU trade officials would first seek a negotiated solution with Chinese authorities, but gave no details of what that solution might entail. Anti-dumping investigations are normally instigated following complaints by a European member state or business, but this time the European trade commissioner has raised eyebrows by proposing the investigation himself. The Netherlands and Britain have voiced concern.

In the UK thousands of jobs could be jeopardized if Huawei is penalized or blocked from markets. The announcement follows a decision last week to slap heavy provisional tariffs on imports of Chinese solar panel parts, a move that has stirred up talk of a potential trade war between China and the European Union.