China and the European Union are finalizing settlement terms by the end of October over their telecom trade dispute, which involves China's exporters Huawei and ZTE.
In May 2013, EU Trade Commissioner Karel de Gucht announced plans to open investigations over Huawei and ZTE for their alleged anti-dumping violations and illegal subsidies from the Chinese government. In March 2014, the EU said that it would not pursue the investigation on the anti-dumping policy violations.
An EU document states, as cited in a Reuters report on Tuesday, that prices of Huawei and ZTE equipment are about 18 percent lower than EU-based competitors. The document alleges that Huawei's rise in Europe's market share, from 2.5 percent in 2006 to 25 percent in 2014, could have been the result of illegal state aid.
Annually, Chinese mobile telecom makers export $1.3 billion worth of equipment to the EU, giving European brands such as Ericsson, Nokia Siemens Networks and Alcatel-Lucent tougher competition.
EU officials said that De Gucht took on the issue because European telecom companies had been publicly accusing Beijing of subsidizing Huawei and ZTE, but are reluctant to come forward for fear of China's retaliation.
De Gucht will be relinquishing his post on Oct. 31, and an anonymous source told Reuters that he did not want to pass this issue to his successor.
Beijing has agreed to change its export credit limits for Huawei and ZTE. Both the EU and China agreed to monitor each other's market shares and collaborate on research and standardization.
"The two parties have reached a common understanding on all the four issues and they are looking to cut a final deal," said Reuters' source, who refused to be identified due to the sensitive nature of the trade issue.