China Hits Out at EU Modem Probe

Claims investigations are 'typical trade protectionist measures'

China denounced an EU investigation into Chinese-made modems in a growing series of trade disputes with the European bloc, as an industry group warned affected firms could face huge losses.

The European Union this week launched anti-dumping and safeguard probes into wireless wide-area networking modems imported from China, the Commerce Ministry said on Thursday.

The modems are digital devices that allow connection to wireless networks.

The case affects products worth around 4.1 billion yuan (US$605 million), the ministry said on its website.

"The Chinese public and industry players are deeply unhappy with it and China expresses its deep concern," it said in a statement.

The EU probes are "typical trade protectionist measures" and will "not only hinder the European Union's own economic recovery, but also undermine Chinese interests and harm science and technology development."

An explosion in trade between the European Union and China has led to an accumulation of disputes between the two sides at the WTO, notably over Chinese shoes and certain raw materials. Such probes are carried out to determine whether a product violates trade rules and can lead to retaliatory action.

The Chinese statement added that Beijing "reserved the rights to take further measures" under World Trade Organization rules.

Dumping occurs when exports are sold at below the cost of production. The WTO's 153 member-states have the right to respond by levying extra tariffs.

A WTO member may restrict imports of a product temporarily, known as a safeguard action, if its domestic industry is harmed or threatened with harm from the offending imports.

Liu Huijuan, an official with the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, the industrial association representing Chinese modem makers, said they could incur massive losses.

"A huge impact will be caused to the sector if [the EU] decides to take actions against the product because the European Union and the United States are the two key markets of WWAN modems," she told AFP.

China on Monday also slapped final anti-dumping duties on EU-made steel fasteners.

Copyright Agence France-Presse, 2010

TAGS: Trade
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