Trade friction harms all

Karel de Gucht, Europe's trade commissioner, has demanded China open up 30 percent of its telecom market to foreign suppliers, and that Huawei should increase the export prices of its products by 29 percent.

But his requirements are unreasonable and irrational, says an article of the 21st Century Business Herald. Extracts:

These requirements are against free trade rules and market economy principles and will cause losses on both sides.

The core concept of international free trade is the opportunity for fair market competition.

If European enterprises intend to do business in the Chinese market, they should strive to gain market share through their own competitiveness and innovation.

Asking China to open its telecom market by 30 percent would break the rules of a market economy and harm the rights of Chinese enterprises.

Huawei’s product prices are set according to competition in the EU.

As long as Huawei does not enjoy subsidies from the government, or dump its products, Gucht has no right to ask it to increase the prices of its products.

Since the start of the European debt crisis, the EU has continued to issue regulations that go against free market trade.

For example, the EU is discussing the possibility of levying trade taxes and preventing international credit rating agencies from rating the credit levels of EU countries.

But these potentially compulsory measures cannot solve the debt crisis, in fact, they can only aggravate an already troubled market.

The EU has becomes more wary of national powers, and more disrespectful of market conditions.

China should avoid taking any measures which might escalate trade frictions with the EU.

The Chinese government should review and reform its export tax reimbursement policies and low-interest rate loans to enterprises like Huawei to avoid unnecessary troubles in future foreign trade.