The European Union is urging China to give 30 percent of its market share to EU telecommunication suppliers, the Shanghai-based Oriental Morning Post reported Thursday. If China does not comply, punitive tariffs will be imposed on top Chinese telecommunication companies Huawei and ZTE for their acceptance of “illegal government subsidies”.

 In May 2012, the EU informed its member countries that it had obtained valid evidence to prove that Huawei and ZTE benefited from illegal government subsidies, thus enabling them to dump goods in the European market.

 This is not the first time the EU has launched an attack on Chinese telecom equipment manufacturers.

 If the EU rules that Chinese companies received improper subsidies, ZTE and Huawei will probably face punitive tariffs. This would mean that as the EU's executive arm, the European Commission will make its first initiative to file a trade survey.

 China needs to give 30 percent of its telecommunication market share to the European Union in exchange for the abandonment of the highly controversial survey of Chinese enterprises, EU Trade Commissioner Karel De Gucht said.

 As part of a protocol for China to further open up the telecommunications market, de Gucht also requests that Huawei and ZTE increase the price of its exports to Europe by 29 percent, Financial Times reported.

 “Obviously, China will not accept these conditions,” a European diplomat told Financial Times.

In Brussels, a spokesman for the Chinese mission to EU said that China hopes to solve this problem through consultations and negotiations rather than see a trade war spark between the two parties.