November 22, 2021
The European Commission has finally made a judgement against Chinese vendors for anti-competitive behavior.
The commission has announced tariffs of between 19.7% and 44% on Chinese fiber cable suppliers for dumping.
The tariffs came into effect last week after a 14-month investigation, sparked by a complaint from industry body Europacable, whose members account for more than a quarter of EU cable production.
Figure 1: (Source: Pixabay)
The commission found that in the period 2017-2019, when demand in the China market sharply contracted, the price of Chinese cable products in Europe fell 23%, from €452 to €349 per cable kilometer.
Its judgement noted that the structure of the Chinese economy "not only allows for substantial government interventions into the economy, but such interventions are expressly mandated."
Three FTT companies – Fiberhome, Nanjing Wasin Fujikura and Hubei Fiberhome Boxin – face a 44% penalty, while the two ZTT companies – Jiangsu Zhongtian Technology and Zhongtian Power Optical Cable – have received a 19.7% penalty.
Europacable said following the judgement that the penalties "constitute a necessary and long-awaited step on a path towards restoring a level playing field" in the market.
"The strongly subsidized Chinese optical fibre cable industry has benefited from an unfair competitive advantage allowing it to increase significantly exports to the EU at heavily undercut prices during recent years," it said.
Philippe Vanhille, head of the telecom division at Italy's Prysmian Group also welcomed the decision: "Fair competition must be ensured in the interest of our customers and stakeholders, to guarantee a sustainable availability of quality components for the construction of the European optical infrastructure."
Picking their battles
The EU's imposition of penalties on the optical cable sector, a market worth just €1 billion (US$1.13 billion) annually, contrasts to its capitulation to China over subsidies to the significantly larger telecom equipment market in 2016.
The EC had agreed to call off a probe into state subsidies of Chinese telecom gear in return for the establishment of a joint panel to monitor market abuses. But China stalled on its commitments and the deal collapsed.
Want to know more about optical? Check out our dedicated optical channel here on Light Reading.
The big difference is that European cable makers do very little business in China.
Back then Europe had a share of China's operator equipment market that governments were anxious to protect. Five years on, we can see how well that went.
— Robert Clark, contributing editor, special to Light Reading
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