|
Rapid increase in 4G construction has brought about exorbitant orders for telecom equipment makers, including Huawei and ZTE. This is a fact hard for European vendors to digest.
Ericsson, Alcatel-Lucent and Siemens-Nokia used to occupy a quite large market share in China, but times have changed. The change in market share has nothing to do with government regulation but market competition, said Xiang.
As the trade tensions between China and EU further tighten, many are wondering whether the disputes will escalate into an overall trade war. More communication should be made between Chinese companies and foreign governments to avoid a trade war, which would benefit no one.
"Asking Chinese telecom equipment providers to raise prices is totally impractical. Once Chinese telecom equipment providers are subject to punitive EU tariffs, an overall trade war between China and Europe will happen. This is not conducive for the EU to step out of its crisis," said the industry observer Xiang.
As Huawei and ZTE both want to further expand their overseas businesses in the coming years, Xiang thinks they should be prepared for more roadblocks in the future. "Chinese companies should intensify efforts in communicating with local governments to avoid risks," he said.
Bai Ming, a researcher at the Chinese Academy of International Trade and Economic Cooperation, told People's Daily that Huawei and ZTE's fast overseas expansion has posed a threat to their European peers.
"You can't blame others for your own loss," said Bai. "Huawei and ZTE's price advantage has to do with higher productivity. Also, backed by a large amount of orders at home, they have a lower cost per unit of production."
The EU should consider the possible result of its investigation. It may lead China to lay the same claims to restrain European companies, said Bai. Ericsson, Alcatel-Lucent and Siemens-Nokia didn't bring up the case to the EU Commission, and Ericsson even said that it doesn't want to see similar investigations against it as the company doesn't want to risk losing the Chinese market.
Wang Danqing, partner at the Adfaith Management Consultation Co., says a trade war is in no one's interest.
"For Huawei and ZTE's competitors Ericsson, Alcatel-Lucent and Siemens-Nokia, they know that a trade war will lead to a lose-lose result. Once the trade war starts, European companies will lose the immense Chinese market, a result no one wants."
Email us at: zhouxiaoyan@bjreview.com
Huawei Technologies Co. Ltd.
Huawei is a leading global ICT (information and communication technology) solutions provider. Its products and solutions have been deployed in over 140 countries and regions, serving more than one third of the world's population.
Founded in 1987, Huawei's headquarters is located in Shenzhen, Guangdong Province, the frontier of China's reform and opening up policy. Huawei is a Fortune 500 company.
As the world's second-largest telecoms equipment maker and sixth-largest mobile phone manufacturer, Huawei recorded 220.2 billion yuan ($35.36 billion) in business revenue and 15.4 billion yuan ($2.47 billion) in net profit in 2012, up 8 percent and 33 percent, respectively. Among total business revenue, 66 percent is from overseas markets and EU and African markets contributed 77.4 billion yuan ($12.43 billion), or 35 percent of the total.
ZTE Corp.
ZTE Corp. is a multinational telecommunications equipment and systems company headquartered in Shenzhen, Guangdong Province. It is the world's fourth largest mobile phone manufacturer measured by 2012 unit sales and the world's fifth largest telecoms equipment maker measured by 2011 revenues, after Ericsson, Huawei, Alcatel-Lucent and Nokia Siemens Networks.
ZTE's core products are wireless, exchange, access, optical transmission and data telecommunications gear; mobile phones, and telecommunications software.
It also offers products that provide value-added services, such as video on demand and streaming media.
Founded in 1985, ZTE was first listed in Shenzhen Stock Exchange in 1997 and Hong Kong Stock Exchange in 2004.
Net profits at ZTE fell between 2.5 billion yuan ($396.83 million) and 2.9 billion yuan ($460.32 million) in 2012, the company predicted in a report on January 20.
(Source: Company websites) | 
