Chinese officials rejected EU allegations that Huawei Technologies and ZTE (0763.HKG), two of China’s largest telecom equipment makers, benefit from illegal government subsidies that help them undercut prices of European manufacturers, Reuters reported. EU trade officials have been gathering evidence for an anti-dumping case against Huawei and ZTE, respectively the world’s second- and fith-biggest telecom equipment makers. They accuse the firms of profiting from illegal state subsidies and “dumping” their wares on the European market at below the cost of fair production. “We think such accusations are groundless and unreasonable,” said Ministry of Commerce spokesman Shen Danyang. “Huawei and ZTE operate under a completely free market environment. Their products gain global competitiveness via the companies’ active R&D efforts.” Both companies have put market pressure on European firms such as Ericsson (ERIC.Nasdaq, ERIC.OMX) and Alcatel Lucent (ALU.NYSE, ALU.Euronext).