EU Warns China on Trade Probe into Telecommunication Companies

Created: 2013-05-15 15:06 EST

Category: China

The European Commission, the executive branch of the European Union, said today they’re prepared to launch an all-out investigation into unfair trade practices perpetrated by Chinese telecom companies.  

EU Trade Commissioner Karel De Gucht approached the commission today with his proposal. Several major European firms tried to dissuade him over concerns that it would only provoke the Chinese regime into handing out fewer contracts to European companies seeking business ties with China. 
Still, the Commission only agreed upon an investigation in principal. Final-hour negotiations could still avert the probe. The EU is China’s largest trading partner, but China is only number two for the EU. The United States continues to have that top spot.
Part of the problem is the nebulous ties Chinese telecommunication firms like Huawei and ZTE have with the Chinese government. And after US-based security firm Mandiant accused the Chinese military of aggressively hacking into international companies, many countries are thinking twice about giving access to potentially sensitive servers to Chinese interests. 
If the probe happens, it will mark a new phase in the EU’s relationship with China. In the past, this kind of probe would only be launched in response to a specific complaint by a European firm. This however, is the EU itself taking action, despite concerns of some European companies.