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back to article Euro states stick fingers in ears to Huawei, ZTE tech 'dump' claims

A number of EU countries aren't keen on backing the European Commission's bid for a formal investigation of Chinese telecoms manufacturers Huawei and ZTE, Sweden has said. The commission's trade watchdog has been collecting evidence on alleged subsidies and "dumping" - selling products below cost to undercut European rivals - …

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Anonymous Coward

As opposed to sticking their fingers in their ears it may be that they're making sensible business decisions as well as allowing their consumers to purchase cheaper kit allowing them to spend money on things like employment and r&d?

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Anonymous Coward

Fair trade

Why not reciprocate the Chinese rules and demand they make 50% partnerships with EU companies if they want to operate here. The Chinese are laughing, while we slowly destroy our last remaining industries.

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Silver badge

Re: Fair trade

Don't know why you got the downvotes. You asked a sound question. International trade offsets are common in most large industries, I don't know whe telecoms equipment should be any different.

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" but European hardware manufacturers such as Ericsson, Alcatel Lucent and Nokia Siemens Networks aren't interested in moaning about the firms for fear of retaliation in the potentially lucrative Chinese market, sources have whispered"

Or, you know, they might not actually believe the Chinese firms are dumping at all...

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Alert

Yes, the last thing they want is that investigation to include is a study to establish what the cost price of these things really is, which is something of a prerequisite for establishing whether someone's price is likely to be cost plus (ok) or not (dumping).

Note how striking the (sim-free) price drop of a smartphone is between its launch and what you can pick it up for some months later. Presumably they're not actually flogging the things at a honking loss once the "must have now" shine has dulled on them.

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Anonymous Coward

Or maybe

They are far more suspicious of the septic tank made gear, and rightly so as it comes with a free pair of NSA headphones.

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Anonymous Coward

Not sure about dumping.....

If Huawei or ZTE want a slice of business in Africa, they send in team of 20 (compared to the more typical 2-3 of European competitor) and will happily give expensive kit away. For the the procurement team, it's a no brainer. For operations, it gets complicated because that's when the Chinese companies claw back all their investment (making operations look bad).

And it's an easy for them way to operate - they make a lot of their own hardware, whereas a lot of Western, edge of network suppliers (voice mail systems, converged billing systems, SMS service centres and so on) are really software companies and integrators who can't afford to give away a stack of HP servers they've just bought and then claw back some profit later (they have to pay HP or Sun).

So it's not really dumping. Huawei and ZTE make a profit on their equipment eventually, while benefiting from the Chinese labour market to boost their profits. Oh, and the kit is good. While Ericsson and NSN sat on their hands, the Chinese learned how to build a first class 3G/4G network.

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Coat

Re: Not sure about dumping.....

I am not sure either, no doubt the cost of labour is lower in China than in the "west" but still I remember what a chock it was for the US and Intel when the Japanese managed to outperform Intel in memory, dumping, not really they simply got more out of their wafers due to better technology. Perhaps we have become "fat cats" too lazy, spending too much time with playing golf or something. Looking at the street view of us, I think would support that. Investing in new plants, new technology, fine, but only if there is a short term advantage, newer mid long term.

"The EU side has been frequently resorting to trade remedy measures to restrict access of Chinese products to the EU market".

I have a feeling China has done the same towards us, in the west too, though.

And finally the saddest question of all questions, governments, certainly we are superior in that respect, if in nothing else.

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Re: Not sure about dumping.....

"Oh, and the kit is good. While Ericsson and NSN sat on their hands, the Chinese learned how to build a first class 3G/4G network."

Yes, but did they teach themselves?

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Anonymous Coward

Re: Not sure about dumping.....

"Yes, but did they teach themselves?"

Of course they did. They mostly copied NSN's software and improved it. They learned a great deal from the experience.

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Holmes

Remember Munich!

Appeasement never works. China will eat up these companies sooner or later, using their current tactics, And the playing field in China is tilted too.

EU should slap China around a bit, and at least preserve their own market for companies that play fair.

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this sounds to me like a few companies have got together and complained that someone else is selling similar products cheaper.

if someone can make a product that does everything they claim it does they can choose to sell it at whatever price they choose (even if that price represents a loss to try and establish a user base)

if they are selling at a loss then they must have some plan to recover that cost elsewhere just like every other company that sells products for a loss, Printers etc recoup the money on consumables, supermarkets (which did sell some product at a loss years ago) recoup the money by driving smaller competitors out of business.

if you don't like a manufacturers strategy don't buy their kit (of course your competitors can buy it and then undercut you due to lower overheads)

it's simple market forces at work, the value of a product is set by the lowest price somebody will sell it at, those that can't afford to match (or come close to) the price suffer

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