Huawei denies subsidy allegations

Chinese vendor Huawei has refuted claims that it has accepted subsidies from the Chinese government which allowed it to sell equipment at substantially lower rates than foreign rivals. The vendor has issued a statement following reports that the European Commission may launch an investigation into the case.

“We deny any claim that Huawei employs dumping practices and has benefited from illegal state subsidies. Huawei also objects to the investigation that the European Commission is reportedly launching on the basis of these claims,” said the statement.

The company also added that it “applauds” the European Commission’s stance on encouraging fair and open competition, noting that the telecoms industry “requires an open environment” to become truly global.

The European Union reportedly has access to evidence which exposes subsidies granted to ZTE and Huawei by the Chinese government as an explicit means of undercutting rival vendors in the international arena. According to the vendor, the European Commission has not contacted it with regard to an investigation.

If an investigation found that Huawei and ZTE received illegal subsidies, both could face “punitive tariffs” –measures that have been opposed explicitly by Ericsson. An EU investigation could upset the Chinese government, and this could have serious ramifications for foreign vendors with business in the country, such as Ericsson, NSN and Alcatel-Lucent.

Ericsson’s head of government and industry relations Ulf Pehrsson expressed the firm’s opposition to any potential punishment, saying “Ericsson is a strong supporter of free trade and we don't believe in this type of unilateral measure." Singling out Chinese firms would, he claimed, create a “negative spiral”.


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