BRUSSELS--The European Union's trade chief will ask for backing this week from senior members of the bloc's executive arm to start investigations into alleged unfair trade practices by Chinese network equipment suppliers Huawei Technologies Co. and ZTE Corp. (ZTCOY, 0763.HK, 000063.SZ), an EU official said, amid concern from European companies that such a probe could prompt a backlash against their interests in China.

The threat comes at a sensitive time for European telecom-equipment suppliers, which are looking to increase their business in China.

Europe's three major suppliers--Ericsson (ERIC), Alcatel-Lucent SA (ALU, ALU.FR) and Nokia Siemens Networks, a joint venture between Nokia Corp. (NOK, NOK1V.HE) and Siemens AG (SI, SIE.XE)--are hoping to win significant business from Chinese telecommunications operators as they embark on multibillion-dollar spending programs to roll out high-speed wireless data networks.

The European companies fear that a decision by the EU to start the investigations could lead to retaliation against them by the Chinese operators, which are controlled by the Chinese government, leaving Huawei and ZTE with the bulk of this business.

Ulf Pehrsson, head of government and industry relations at Ericsson, said the Swedish telecommunications company opposes starting the investigation.

"We don't believe in this type of unilateral measure," Mr. Pehrsson said. "Ericsson is supporting global rules that apply for all industry players. The EU faces the risk of initiating a negative spiral by targeting individual firms."

One person familiar with the debate said "the Europeans are afraid that the state-owned enterprises in China are going to use a case like this not to give the European firms as many contracts."

The probe would be among the first ever started by the commission without receiving a complaint from a European company. Though EU law allows the commission to take such a step, it would be treading into a politically sensitive area where some nations, Sweden in particular, want the commission to back off.

According to the EU official, EU trade chief Karel De Gucht will ask for support from the other members of the European Commission, the EU's executive arm, to start the investigations at their weekly meeting on Wednesday.

European officials are closely watching which firms get the Chinese contracts as they decide whether to open the investigations.

Mr. De Gucht hasn't yet decided whether to launch the probes, the official said.

EU officials contend Huawei and ZTE have used hefty subsidies from the Chinese government, such as cheap credit from state-owned banks offered to the Chinese firms or their customers to buy the equipment they make. These subsidies, officials believe, have been used to sell their goods at unfairly low prices and snatch big chunks of the EU market.

Chinese exports of base stations--a key component of wireless networks--to the 27-nation EU have soared over the past five years, while prices have plummeted.

Brussels and Beijing have held several rounds of negotiations on the issue. Commission officials were looking for pledges from the Chinese to sell their goods in Europe above a minimum price, but meetings over the past year ended without a deal.

Huawei says it doesn't receive illegal subsidies and denies it is controlled by the Chinese government. A credit agreement it signed with the state-controlled China Development Bank nearly six years ago for $30 billion isn't binding, said spokeswoman Tina Tsai. The agreement is "common commercial practice and it complies with all the international and commercial laws and regulations," Ms. Tsai said.

Mr. Pehrsson said international guidelines are needed for export-financing offered by governments.

Launching a probe could hurt trade relations with China. Europe is already moving to confront China over solar-panel equipment imports, which accounted for about 7% of all Chinese exports to Europe in 2011. Mr. De Gucht's office is planning tariffs of up to 68% on Chinese solar equipment, according to a copy of the plan seen by The Wall Street Journal.

Those tariffs are set to come into effect by June 6.

The amount of money at stake in the push by Chinese telecommunications operators to build high-speed wireless networks is huge. China Mobile Ltd. (CHL, 0941.HK, K3PD.SG), the country's largest telecommunications operator by subscribers, is planning to spend nearly $7 billion on its next-generation network in 2013 alone. China Telecom and China Unicom, two other major operators, also have billions in capital spending planned for this year, though it is unclear how much will be devoted to building out new high-speed networks.

Alcatel Lucent has already gotten a taste of this money from China Mobile, winning part of a large-scale trial that is now in 13 cities. Alcatel Lucent declined to comment.

Nokia-Siemens and ZTE didn't respond to requests to comment.

-Sam Schechner contributed to this article.

Write to Matthew Dalton at matthew.dalton@wsj.com

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