Economy

EU to probe Chinese wireless modems

By Wang Xing (China Daily)
Updated: 2010-07-03 09:13

Industry group calls for level playing field for 'extremely shocked' firms

BEIJING - A top Chinese industry group on Friday urged the European Union to provide a level playing field for Chinese IT firms after the EU launched an anti-dumping investigation into a type of wireless modem imported from China.

The China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME), of which major Chinese equipment makers Huawei and ZTE are members, said the Chinese companies involved are "extremely shocked" by the EU's probe and are actively responding to the investigation.

"Many of the wireless modems imported from China are sold at a higher price than those made in Europe," said Wang Guiqing, vice-president of CCCME. "The EU's investigation is a move that kills market innovation."

The EU investigation, the biggest so far into China's high-tech exports, involves wireless wide area networking (WWAN) modems, devices equipped with radio antennas that allow people to connect wirelessly to Internet networks.

The EU launched its investigation after Belgium-based Option NV, which is the only producer of such products in Europe, complained to the European Commission about the matter, according to the EU's official journal.

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China's Ministry of Commerce said on Thursday that the EU's probe not only hinders the process of the EU's own economic recovery, but also harms China's interests and is not conducive to the development of science and technology.

The ministry said China will pay close attention to developments and reserve the right to take further steps in accordance with World Trade Organization rules.

Although the ministry estimated on Thursday that the case involves about $4.1 billion worth of goods, Wang from CCCME estimated that real value of goods impacted by the case is around $2 billion.

"But that is big enough to make it the biggest foreign probe into China's high-tech exports," Wang said.

According to official figures, China's machinery and electronic product exports to EU reached $146.6 billion last year. The major Chinese exporters of WWAN modems include Huawei Technologies, ZTE Corp, Foxconn and ASUS, CCCME said.

"Chinese products actually promotes technological advancement, create new markets and bring benefits to local consumers," said Wang. He urged that the Chinese government and the European Union to have more negotiations to resolve the issue.

According to an earlier report, the EU has up to 15 months to carry out its investigation. If the commission finds that the products are being dumped at unfair prices, it can impose additional tariffs.

The EU is China's largest trading partner, according to official figures. It is unclear how EU's investigation will impact the bilateral trade relationship between the two economies.