Huawei and ZTE in the center of the storm

Huawei and ZTE have been embroiled in a major controversy over India’s security concerns over using Chinese equipment in the sensitive communication industry.India is the fastest growing telecom market in the world and as result the most attractive one as well.Huawei and ZTE,the two huge Chinese telecom equipment behemoths have garnered a big chunk of the marketshare in India due to their lower priced equipment compared to Western competitors like Alcatel,Nokia and Ericsson.However tensions between India and China have always remained high since the 1962 war.The recent Chinese obstacles for India’s Nuclear Energy plans using Pakistan as a proxy and other anti-India policies have done nothing to improve the relations between the 2 countries.This caused India to virtually ban Huawei and ZTE from India’s lucrative telecom market.ZTE and Huawei ever since have been desperately lobbying to overturn this ban through various measure like  by changing the names of  Chinese employees to sound Indian and using  Indian telecom customers and Chinese trade associations to lobby on their behalf.

China is a master of protectionist policies

The latest report in Indian media that Indian regulation for purchase of telecom equipment has allegedly blacklisted 25 Chinese firms have raised the hackles of the Chinese commerce minister.The Chinese government has voiced concerns over these developments asking for a fair and transparent system so that its companies can compete.Fairly hypocritical in my view considering the huge implicit and explicit subsidies given by the Chinese government to its industries.Also China is a past master in protectionist policies as well with GE’s CEO recently criticizing China over discrimination of foreign companies

Chinese telecom suppliers blacklisted in India – PeopleDaily

It could be said that Chinese telecom enterprises have strong competitiveness in the Indian market and come to be recognized. Nevertheless, Chinese telecom enterprises have suffered heavy setbacks and gained nothing in the Indian market over recent months resulting from the initial ban to the security review and blacklist.Some Indian industry insiders doubt the setbacks of Chinese telecommunications equipment makers were due to the trouble created by interests groups.

Analysts pointed out that the timing of ban was just before the upcoming issuance of 3G licenses in India, so it is nothing more than an attempt to shut Chinese telecom enterprises out of the first round of competition for India’s 3G market through delays. The disclosure of the blacklist by the Indian media was perhaps due to moves by India’s telecom operators, such as Tata and Reliance, to pressure their government to solve the Internet security review issue as soon as possible.

Analysts believe that if the Indian government does shut out Chinese telecom companies, the main beneficiaries would be European and American telecom companies rather than India itself. Chinese companies provide products that have the same high quality as their counterparts from Europe and America but with lower prices, and it is evident that the Indian people will benefit much from the cooperation between China and India.

China voices concern over India ‘blacklisting’ telecom firms – Economic Times

Voicing its concern over reports that its telecom companies have been blacklisted by India, China on Friday asked New Delhi to treat its firms fairly and called for an open and transparent system for them to operate in. “We have noticed the list and are making an investigation. We hope India will provide a fair, open and transparent investment environment for Chinese companies,” Chinese Minister of Commerce Chen Deming said on Friday. He was referring to reports that appeared in a section of the Indian media, which stated that some Chinese companies were being blacklisted by the Indian government. The list includes 25 Chinese vendors, including Huawei and ZTE, official Xinhua newsagency reported. “We will investigate through normal channels between the two governments, and communicate and negotiate with the Indian side after making the facts clear,” Chen said.