De Gucht juggles politics, diplomacy in high-stakes China gambit

Trade Commissioner Karel De Gucht could take action this week against two Chinese telecommunications companies over allegations they benefit from state subsidies, a move that could hobble negotiations and precipitate a trade war.

An internal EU report last year recommended that the EU take action against Huawei and ZTE as their increasing dominance of mobile networks challenged homegrown companies and made them a threat to EU security.

De Gucht could pursue the action in the face of opposition from a majority of member states, but is simultaneously involved in a high-stakes negotiation designed to wrap the telecoms subsidy case with an existing trade dispute on solar panels.

Last year, the EU executive launched its largest dumping and subsidies investigation ever, into an alleged €21-billion worth of solar components exported by China to Europe.