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Reuters reported exclusively this week that
Europe was close to a deal with Beijing on defusing the issue of
what Brussels says are illegal subsidies to Chinese makers of
equipment for mobile telecom networks.
De Gucht confirmed the progress, telling reporters at an event
in Berlin: "We are confident that the subsidy proceedings
against the network providers can be resolved next week."
He gave no details but the EU and China are understood to have
prepared the draft of a deal ahead of a meeting between Chinese
Premier Li Keqiang and senior EU officials at a summit in Milan
on Oct. 16-17.
Imports of such telecoms equipment into the EU are worth an
annual 1 billion euros ($1.3 billion) and bring Chinese
companies into competition with European companies including
Ericsson, the world's biggest mobile telecom equipment maker,
Nokia Siemens Networks [NOKI.UL] and Alcatel-Lucent.
According to an EU document seen by Reuters, the Commission says
the swift rise of Chinese manufacturer Huawei [HWT.UL] in the
European telecoms equipment market to a 25 percent market share
from 2.5 percent in 2006, could only have been achieved with
state aid that global trade rules say are illegal.
Beijing is considering a deal in which China promises to limit
its export credits to Huawei, China's No. 2 telecoms equipment
maker, and smaller ZTE, people close to the talks told Reuters.
Both sides would also agree to monitor the market share of
Chinese telecoms companies in Europe and European companies in
China. They would also cooperate on industrial research and
standardization in the telecoms sector.
Resolving the telecoms issue could dramatically change the tone
of the bilateral relationship.
Europe is China's most important trading partner and for the EU,
China is second only to the United States. A successful telecoms
agreement could pave the way for a wider free-trade accord.
(Writing by Robin Emmott; Editing by David Holmes)
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