China, EU clash over wireless modems
Beijing accuses EU of protectionism; Commission probes modem dumping
By Jennifer Baker | Published: 09:35, 06 July 2010
China has hit back at the European Commission over an investigation into allegations of hardware dumping.
The Commission launched the probe after Belgium modem-maker Option formally complained that Chinese companies were dumping WWAN (wireless wide-area network) modems onto the European Union market at absurdly cheap prices. However, Beijing has now accused the EU of protectionism.
Option's wireless modems are the only ones produced in the EU, and its products competed effectively everywhere except Europe because Chinese firms were dumping hardware, it said.
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The Commission is responsible for investigating allegations of dumping by producers in non-EU countries. It could impose extra import duties if it believes the hardware is being exported to the EU at prices lower than the normal value of the product in the producer's domestic market.
The EU is China's largest trading partner, and this disagreement could be damaging to economic recovery in the hardware market of both blocs. China's Ministry of Commerce said on its website that is was gravely concerned about the situation and that it reserved the right to take further action.
The dispute leaves EU consumers in doubt about the best time to purchase a wireless modem. If additional duties are imposed the price of Chinese modems will increase, but the investigation could take up to 15 months.
