Infinera complains to US about China subsidies

Dylan Bushell-Embling
15 Jun 2012

Chinese telecom vendors now face the prospect of an investigation into state subsidies in the US as well as Europe, with a US vendor voicing complaints about the practice to a congressional commission.

Infinera, an optical equipment vendor, has accused the vendors of receiving unfair government support, Reutersreported.

Chief legal officer Michael McCarthy has provided testimony to the US-China Economic and Security Review Commission, arguing that the US must act to ensure that competition remains in the optical networking segment.

He asserted that China plans to provide economic support to ensure that vendors such as Huawei and ZTE attain dominance of the sector, and then use this dominance to squeeze out competition.

“Our response must be equally clear to ensure the competition in this vital sector is not based on which government is willing to lavish the most aid to their producers,” McCarthy said.

Infinera has not yet confirmed whether it will make an official petition for the US government to impose duties on imports of Chinese gear.

But McCarthy told the panel he was encouraged by reports that the European Union was considering imposing their own duties.

It was reported last month that the European Commission may launch a major probe of Chinese government subsidies for telecom equipment, and potentially impose punitive tariffs on imports.

European vendors have been reluctant to support the potential EC action, due to fears China would retaliate with measures to make it harder for them to sell gear to the Chinese market.

Both Huawei and ZTE have firmly denied unfairly benefiting from state subsidies.

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