Chinese Telecom Companies Caught in Middle of Trade Dispute

“Actually in France, this market is quite developed and Huawei and Alcatel can coexist, just like in China,” Mr. Hu said at a hotel in the Trocadéro neighborhood. “I don’t want there to be a misunderstanding. We are not here to replace Alcatel. It would be like saying Alcatel is coming to China to replace Huawei.”

A month later, on May 17, the European trade commissioner, Karel De Gucht, accused Huawei and another Chinese equipment maker, ZTE, of violating the antidumping and subsidies laws of the European Union. Mr. De Gucht, a Belgian lawyer, called for negotiations between the European Union and China to avoid an investigation that could lead to punitive customs duties.

Now the two sides appear set to meet in an attempt to work out their differences. China has asked that Mr. De Gucht hold an informal meeting with its vice commerce minister, Zhong Shan, in Brussels on Monday, China’s Ministry of Commerce and a European Union trade spokesman confirmed on Sunday.

“It appears that the commission is using the telecom equipment situation as some kind of a stick and bargaining chip against China,” said Stuart Newman, an antidumping expert at the Foreign Trade Association, a Brussels group that represents European trade associations.

Mr. Newman said the Europe-China trade relationship had become more difficult over the last two years, driven by disputes over solar panels and now, telecom equipment.

The 27-nation European Union is China’s biggest trading partner, the destination for Chinese exports worth 289.7 billion euros, or about $377 billion, last year. Last September, Mr. De Gucht opened an antidumping investigation of Chinese solar panel makers after receiving a complaint from a European industry association, EU ProSun. That investigation is set to end this year.

The stakes in the solar panel dispute dwarf those of the telecom equipment makers. Last year, Chinese exports of solar panels and components to the European Union were roughly 21 billion euros, while shipments of telecom network gear were only about 1 billion euros, according to European Commission figures.

China’s commerce minister, Gao Hucheng, said in comments published on Sunday on the ministry’s Web site that he hoped the disputes over photovoltaic and telecommunications products could be solved through talks.

A meeting on Sunday between the Chinese premier, Li Keqiang, and the German chancellor, Angela Merkel, also touched on the trade tensions. Both leaders emphasized their desire to resolve the dispute over solar tariffs, which Mr. Li said China considers dangerous to the global economy.

“These are measures that will flood into the neighboring countries, and are not useful to anyone,” Mr. Li said.

A person close to the European negotiating team played down the Chinese push for dialogue, saying the country’s trade officials were maneuvering ahead of June 5, when Mr. De Gucht is expected to reveal the level of punitive tariffs that the European Commission intends to impose on Chinese solar panel makers. Serious negotiations with the Chinese will begin only after the commission publishes the customs duties, the person said.

An important difference separates the telecom equipment and solar panel situations. For the telecom sector, formal legal proceedings have not yet begun, and an agreement between governments could head them off.

On the solar panel case, antidumping and antisubsidy cases are already well along, greatly limiting the statutory authority of European officials to negotiate. Once the European Union announces the preliminary level of antidumping duties, then any deal would legally need to take the form of an offer by the Chinese industry, not the Chinese government.

Hakan Wranne, an analyst at Swedbank in Stockholm, said Mr. De Gucht’s accusations suggested that the commissioner believed he had a good case against Huawei and ZTE. “I don’t think he would be making these types of claims unless he felt he had solid evidence,” Mr. Wranne said.

But a prosecution of the Chinese telecom equipment makers could cost European rivals in terms of lost revenue in China, where the state-owned mobile operators are preparing for what may be multibillion-euro contracts to build the country’s first fourth-generation high-speed networks.

Keith Bradsher and Chris Buckley contributed reporting from Hong Kong, and Melissa Eddy from Berlin.