The EU has set out plans to investigate Chinese telecom firms, ZTE and Huawei, over the companies’ pricing strategies in Europe.
Both the companies hav beenaccused of violating anti-dumping and anti-subsidy guidelines.
EU Trade Commissioner Karel De Gucht told Reuters that he was prepared to launch a formal investigation into anti-competitive behavior by these Chinese companies in order to protect a "strategic" sector of Europe’s economy.
"Huawei and ZTE are dumping their products on the European market. Cheap capital for these Chinese companies creates a distorted playing field," De Gucht said.
Last year, China was reported to have generated more than $372bn in revenues to the EU with Huawei becoming the largest telecom equipment maker globally overtaking the European-based Ericsson, while ZTE was at fifth place.
Hawei Technologies president of Western Europe, Tao Jingwen, told China Daily that the company will take strong action if the EU starts an investigation.
Jingwen said that the EU should work to improve its dialogue and communication with the industry, rather than simply decide to go down the route of imposing sanctions against companies.
Last year, the US House of Representatives’ Intelligence Committee said that Huawei and ZTE should be barred from doing business in US market as they pose a security threat to the country.