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Chinese study calls out EU funding following European allegations of China state aid

Following on from allegations originating from European vendors that Chinese firms such as Huawei and ZTE are receiving state funding, China’s Ministry of Commerce has accused the EU of the same thing in a new study.

The Ministry alleges that billions of Euros have been provided to vendors in the last few years by both the EU itself and certain member states, violating the regulations of the World Trade Organisation (WTO).

The study is likely to be used as a rebuttal of the European allegations, which were formalised by an EU document following an investigation. The complaints arose when European vendors noted that their Chinese counterparts were able to charge drastically lower prices as certain Chinese state-owned banks provided them with credit lines.

Meanwhile, the allegations that China has directed at the EU – along with several of its member states – claim that vendors have received subsidies via export credits, loans, and R&D funding. The study found that the period of 2007 – 2013 will see EUR9.1billion of EU R&D funding donated to Nokia Siemens Networks, Alcatel-Lucent and Ericsson, the three largest European telecoms vendors.

The study goes on to claim that the last five years have seen EUR25 billion in non-commercial loans guaranteed by various European export credit agencies to fund telecom projects, while the European Investment Bank loaned a further EUR1.45 billion to three other manufacturers on non-commercial terms.

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