EU escalating telecom dispute to harm trade ties(2)

Sang said the commission's protectionism targeting China will do harm to the latter without benefiting the 27-nation bloc itself.

He said the EU took action against Chinese telecom equipment makers without receiving complaints from local manufacturers as a result of its continued economic slump.

The EU's move will likely create a "lose-lose" situation, as Chinese companies' European counterparts are deeply engaged in China, which has overtaken the United States as the world's largest smartphone market, said Ren Baiming, a senior international market researcher at the Ministry of Commerce (MOC).

"China will likely take retaliatory action," Ren said.

MOC spokesman Shen Danyang warned last week that China will take firm action to protect its legitimate interests in line with World Trade Organization rules and Chinese law if the EU insists on launching the probe.

"EU companies have a bigger market share in China than Chinese firms do in the eurozone," Shen noted, adding that both sides have been discussing the issue since the second half of last year.

China is currently involved in 18 out of 31 ongoing trade investigations launched by the EU. Bilateral trade declined by 3.7 percent year on year in 2012.