EU investigating against Huawei and ZTE about illegal subsidies from their government

The European Union again blamed Chinese telecom equipment makers of getting "illegal" subsidies from government, and is set to launch a major trade case against the two companies, the Financial Times said.

The EU told member states that it had been gathering evidence for an anti-dumping case against Huawei Technologies Co Ltd and ZTE Corp as if they had obtained illegal government subsidies and sold products in the EU below cost, the newspaper mentioned.

Huawei and ZTE, the world's No.2 and No.5 telecom equipment makers, could be subject to punitive EU tariffs once the EU determined that China was acting illegally, the FT said.

Huawei and ZTE compete globally and given a tough time in the telecom equipment business to European vendors such as Ericsson, Alcatel-Lucent (ALU) and Nokia Siemens (NSN).

The EU's Trade Commissioner Karel De Gucht said in May, the EU was planning new trade defenses to counter subsidies and dumping by trading partners, such as China, which is the European Union's second biggest trading partner after the United States.

De Gucht already complained that China subsidies "nearly everything", making it hard to compete.