Huawei answers allegations about its selling prices

Máire Geoghegan-Quinn, Member of the EC in charge of Research, Innovation and Science, received Ren Zhengfei, CEO of the Huawei Technologies.

Two major Chinese providers of mobile phone equipment, Huawei Technologies Co. and the smaller ZTE Corporation, according to a Wall Street Journal report are under scrutiny by the European Commission, for allegedly offering their products at dumping prices. This report is still unconfirmed by the EU authorities. Its wording though is very carefully chosen by the WSJ writer, reading as follows, “European officials are now debating whether to take the next step: an investigation that would risk igniting a trade war with Beijing”.

If those unnamed European officials do take this step, the newspaper will be confirmed, but if they don’t take the “risk to ignite a trade war with Beijing”, again WSJ will not be refuted. Thanks to this very careful writing, in either case, the reliable in every other respect newspaper, will not be caught as making news out of its own wishful thinking. Or even worse, the newspaper will not be exposed as exercising undue pressure on the European Commission, to follow Washington in ill-treating the two Chinese companies. Or is it already exposed?

At this point it has to be reminded that last October, the U.S. House of Representatives Intelligence Committee issued a warning, saying that Huawei and ZTE present security risks to United States and asked the American mobile telephony providers, “to seek other vendors for their projects and block acquisitions and mergers involving Huawei and ZTE”.

The problem for the good newspaper is that despite a harsh reaction from Beijing against Washington, Huawei officials played down the whole affair and commented, that their global operations are not at all threatened. Later on Chinese government officials followed in defusing the issue and left to be understood, that it is unthinkable for Beijing to start a trade war with the EU, given the difficult economic conditions all over the globe.

Coming back to Europe only some months ago, Michel Barnier, Member of the European Commission responsible for Internal Market and Services Competitiveness, delivering a speech entitled “the key to growth in a strong Europe” on the occasion of a ceremony staged to award the Charlemagne Prize to the German minister of Economics Wolfgang Schäuble on 16 May 2012, praised Huawei saying that “it has become global champion”.

By the same token, Joaquín Almunia, Vice President of the European Commission responsible for Competition Policy Antitrust enforcement, delivering a speech entitled “Challenges old and new”, on the occasion of the 19th International Competition Law Forum, on 8 June 2012, said:”As to the latest developments, we have received complaints by the Chinese handset manufacturer Huawei against InterDigital – a US-based company“.

If there was the slightest evidence that Huawei was following price dumping practices in the EU, Almunia and Barnier would have avoided siting Huawei as a paradigm company.

In any case the company reassured everybody that its selling prices are similar all over the world, evidently denying that in no case the group is practicing price dumping in the EU. The Brussels’s authorities can very easily verify this statement.

Incidentally, this Chinese mobile telephony equipment and services provider is so deeply implicated in the entire European telecommunications market, cooperating with the largest device providers and network operators to such an extent, that seems impossible for the European Union, to follow the Americans in molesting it. Only recently Clearwire confirmed to the daily newsletter ‘FierceWireless’, that Huawei is one of two firms which are chosen to build its planned TD-LTE network.

A British market analyst went as far as to say that, “UK’s digital future, as well as economic wellbeing are at stake, depending on whether the government deems telecoms giant Huawei Technologies, a cybersecurity threat and blacklists the company, following an investigation”.

The Chinese company is also a linchpin in France’s digital markets. Huawei and France Telecom’s Orange have signed an agreement, to develop jointly smartphones, mobile broadband devices and tablets. The deal covers more projects and aims to merge Orange technology and marketing abilities, with Huawei’s excellent device development and integration qualities.

In short, given the long list of Huawei’s joint ventures in Europe, with almost all major producers and operators, the company cannot be termed any longer as an exclusively Chinese firm.

At the end of the day, it seems that the Europeans will not forfeit the possibilities, Huawei can offer to the entire old Continent’s telecommunications industry. Device co-development, equipment joint production and marketing agreements between Huawei and European firms, can bring the EU’s digital sector, at the cutting edge of world markets.

See WSJ article: http://online.wsj.com/article/SB10001424127887323316804578165231686297180.html