China, EU 'must communicate with each other' for a win-win solution

Beijing urged Brussels to show restraint amid reports that the European Union is poised to probe Chinese telecom companies in Europe.

Visiting Chinese Minister of Commerce Chen Deming delivered the message at the EU's headquarters on Friday morning after a meeting with his EU counterpart Karel De Gucht.

Chen implied that if Brussels uses punitive measures to protect its market, Beijing is also ready to do so. "European telecom companies have also invested in the Chinese market for years ... we are not willing to see the win-win situation destroyed or weakened," said Chen.

"China and the European Union should communicate with each other properly, refraining from using protectionist measures; otherwise, both will become losers," Chen added.

He made the remarks after a report in the Financial Times said the EU is ready to launch trade complaints and investigations against Chinese makers of mobile network equipment, including Huawei and ZTE, as soon as next month.

The report said the European Commission, the EU body charged with investigating trade complaints, has got "very solid evidence," showing that the companies benefited from illegal government subsidies and had sold products in the EU below cost.

Brussels promised again during the meeting on Thursday chaired by Chen and De Gucht that the EU will not use such measures.

Chen urged the Western media to take a "positive" approach to China's investment in Europe.

Shortly after the Financial Times report, official sources told China Daily that Beijing will retaliate if Brussels takes such actions.

The EU's planned investigation has already triggered concerns in Europe.

Swedish Trade Minister Ewa Bjorling warned that a planned probe by the European Commission into "illegal subsidies" received by Chinese wireless network vendors risks backfiring on the European wireless network industry

"While Chinese companies' share of the EU's wireless equipment market is 30 percent, one has to remember that the EU's share of China's wireless equipment market is 45 percent. So if China were to hit us back with similar measures, it would hurt us more than what it would hurt them," she told the media.

At the meeting, both sides agreed to launch negotiations on an investment treaty, although no timetable was set.

De Gucht said the meeting with Chen was an extremely important opportunity for both sides to engage with each other on key trade issues.

"We discussed trying to push forward our talks on investment," said De Gucht, adding that it is right time for both sides to step up efforts to launch the negotiations on investment as soon as possible.

"I believe such negotiations are very important not only economically but also to show to the world in trade issues China and Europe can do business."

Duncan Freeman, research fellow at the Brussels Institute of Contemporary China Studies, said De Gucht's emphasis on the investment treaty reflects the importance the EU attaches to this issue. "In the current European crisis this is not surprising, as the EU sees an investment treaty as a way of improving access to the growing Chinese market," he said.