Commission threatens Chinese firms with trade penalties

Press conference by Karel De Gucht, Member of the European Commission, on the proposal to strengthen the EU's trade defence instruments. (EC Audiovisual Services).

Press conference by Karel De Gucht, Member of the European Commission, on the proposal to strengthen the EU’s trade defence instruments. (EC Audiovisual Services).

European Union Trade Commissioner, Karel De Gucht, announced yesterday that, “The European Commission has today taken a decision in principle to open an ex officio anti-dumping and an anti-subsidy investigation concerning imports of mobile telecommunications networks and their essential elements from China”. Without naming individual firms this Commission decision is directly targeted against two international companies originating from China, the Huawei Technologies Co. giant and the smaller firm ZTE Corporation. The Commission opens this investigation on Chinese telecommunication equipment producers for allegedly using price dumping practices and receiving state subsidies.

Some weeks earlier the Commission had issued a note saying it will strengthen its legislation to protect its home market from international competition. This European Sting writer, Dennis Kefalakos, wrote on 12 April “the European Commission, announced yesterday its proposal for a new legislation targeted at strengthening the protection of home businesses and products from external competition. It’s a clear effort to help the Union’s economy overcome a deepening recession. The new legislations will be in force early in 2014, after being approved by the Parliament and the Council”.

Presently however the new step against those two companies may trigger strong retaliation measures from Beijing, or even worse a trade war. The Chinese administration has proved that from now on there will be swift reaction to such trade obstacles aimed against the country’s exports. The European Sting wrote on this occasion: “Is it possible that those people in the European Commission truly believe the new tools to protect the EU markets and producers will pass unanswered? Are they forgetting in Brussels, that Beijing just imposed extra duties on European and American products?”

South East Asia blues

Incidentally it’s not only the penalties and the non-tariff barriers on Chinese product imports often imposed by the European and the American authorities that have enraged Beijing. It is much more than that. It must have been much more embarrassing for the Chinese government to watch the West supporting, if not actively at least by omission, the new Japanese mega-policy to revitalise the rising sun country’s economy, through more borrowing and a much cheaper yen.

It was a revelation for independent economic analysts to see the latest gathering of the G7 group of countries some days ago (United States, Japan, Germany, France, Britain, Italy and Canada) to let Japan get away with its policies to flood the market with newly printed yen, destined at restarting its stagnating economy through a generous devaluation of the yen. This major development in South East Asia may change the economic status quo in the area, with clear western political and economic support to Japan against everybody else in this crucial area of the world. The main victims of the much cheaper yen would be the Chinese and the South Korean exports.

Seemingly the European Commission being in the centre of all that, tried to make its new step against the Chinese products a bit less embarrassing. The relevant announcement by De Gucht in the very second paragraph stressed that, “This decision will not be activated for the time being to allow for negotiations towards an amicable solution with the Chinese authorities”. The Commission explains also that “An ex officio trade defence action allows the European Commission to launch a trade defence investigation on its own initiative without an official complaint by the EU industry”.

Now in reality there is not the slightest complaint from the main European telecommunication equipment producers against the Chinese exporter. The reason is that as the Chinese firms operate in the European market and make plans for the future, in exactly the same way the EU companies are presently making plans for a strong expansion in the vast Chinese market. Those plans may be put in danger, if the Commission insists on punishing Huawei and ZTE. On top of that those two companies, and mainly the first one, play a key role in mobile telecommunication markets all over the European Union. Practically all major mobile network operators in Europe maintain close relations with Huawei and a possible imposition of penalties in this firm could lead to operational and technical problems in many mobile networks.

This leads us to conclude that the new step by the EU Commission looks like being politically rather than economically motivated. For this reason the Commission says that this ‘own initiative’ will have no immediate effect, obviously because it may also hurt some major European firms. Negotiations may close this issue amicably.

Advertising

Advertising

Advertising

Advertising

Featured Stings

Stopping antimicrobial resistance would cost just USD 2 per person a year

EU’s guidelines on net neutrality see the light although grey areas do remain

Britain, EU take edgy steps to unlock Brexit talks as the war of words rages

Sweden well ahead in digital transformation yet has more to do

A day in the life of a refugee: We should be someone who helps

EntEx Organises 5 Summer Schools for Young Entrepreneurs across Europe in June/July 2014

Sustainable Infrastructure and Connectivity in the Belt and Road Initiative (BRI): a stimulating China-EU dialogue at European Business Summit 2018

Sanctions on Russia to be the biggest unity test at this European Council

Parliament sets conditions on EU-China investment deal

Medicine and mental health: relax, the doctor is a lifelong learner

‘More time’ agreed for buffer zone, to spare three million Syrian civilians in Idlib

EU confronts environmental threats as global leaders attempt to revive the global sentiment at NYC climate week

COP21 Breaking News_05 December: Children Will Bear the Brunt of Climate Change: UNICEF

Appreciation of euro to continue

COP21 Breaking News_08 December: Global Business Community Comes to Paris with Solutions for Taking On the Climate Challenge Across the Board

EU: All economic indicators in free fall

EU-US relations on the dawn of the Trump era

Trump to run America to the tune of his business affairs

A jingoistic Spanish ‘war’ from the past

SoftLayer, an IBM company, @ TheNextWeb 2014: Masters of Failure and Change

China will be the world’s top tourist destination by 2030

The future of energy in Puerto Rico is renewable

Preparing the future today: World Health Organisation and young doctors

How can we measure real progress on the Sustainable Development Goals?

China is the first non-EU country to invest in Europe’s €315 billion Plan

Draghi proposes timeframe for full Banking Union in five years

The quality of health education around the globe

Intel, Almunia and 1 billion euros for unfair potatoes

Is Eurozone heading towards a long stagnation?

Paris agreed with Berlin over a loose and ineffective banking union

Irish Presidency: Not a euro more for EU budgets

5 amazing schools that will make you wish you were young again

ECB with an iron hand disciplines the smaller Eurozone member states; latest victim: Greece

How this one change can help people fight poverty

Brussels waits for the Germans to arrive

Medicine in the 4th Industrial Revolution: the third entity of the new doctor-patient relationship

Why social working cultures are happier and more productive

Apple’s tax avoidance scheme remains as creative as their new iPhone

Violence will not deter Somali people in their pursuit of peace, says UN chief, in wake of lethal attacks

Africa Forum aims to boost business, reduce costs, help countries trade out of poverty

1 million citizens try to create a new EU institution

European Accessibility Act: Parliament and Council negotiators strike a deal

5 ways to net a sustainable future for aquaculture

Worldwide consumer confidence has shot up to its highest level for four years according to a survey of 130 Global Retail leaders

Junior Enterprises as a solution for Youth Entrepreneurship

EU to negotiate an FTA with Japan

100 years after Polish independence, 5 reasons to be cheerful for the future

The migration crisis is slowly melting the entire EU edifice

GSMA Announces Latest Event Updates for 2018 “Mobile World Congress Americas, in Partnership with CTIA”

‘Jerusalem is not for sale’ Palestinian President Abbas tells world leaders at UN Assembly

We know ethics should inform AI. But which ethics?

PM May fosters chauvinism, declares trade war on Europe

The EU sides with China against the US; but has Germany capitulated to America?

More taxpayers’ money for the banks

Legal Manager – 2050

Trump questions US – Europe kinship, approaches Russia

Ecocraft: take gaming to another level by greening Minecraft

Replacement for United States on Human Rights Council to be elected ‘as soon as possible’

MWC 2016 LIVE: The top 5 themes of this year’s Mobile World Congress

Could robot leaders do better than our current politicians?

Britain’s May won the first round on the Brexit agreement with the EU

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s