China's commerce ministry denied conducting a study on European Union subsidies for telecom firms but said any such trade protectionism is unacceptable.

A faxed statement from the Ministry of Commerce added that it would pay close attention to information about alleged European telecom subsidies mentioned in a report by the Wall Street Journal.

The newspaper reported that a study by China's commerce ministry had found that EU member countries had provided funds, including 9.1 billion euros ($12.5 billion) for research and development, to three large European telecom-equipment manufacturers between 2007 and 2013.

It also said export credit agencies had guaranteed risky loans of more than $35 billion for telecom infrastructure projects, and that the European Investment Bank had issued more than $2 billion in loans on non-commercial terms to European telecom-equipment makers.

"The Ministry of Commerce did not conduct the study mentioned in news reports, but is paying close attention the information revealed about European Union subsidies in the telecom industry," the statement said in response to a Reuters inquiry.

"The Ministry of Commerce believes that any trade protectionism in the name of trade remedies is unacceptable, and the Chinese government consistently advocates for free trade and opposes protectionism," the statement said.

The EU delegation in Beijing had no comment on the study when contacted by Reuters on Thursday.

But an EU document sent to EU member governments in early February cited evidence that China's main telecom producers Huawei and ZTE are state-controlled and receive cheap loans that give them an unfair advantage over European rivals. (Reuters)