A source from the China side in Brussels said that although it is clear Brussels is keen to gain more market access in China, "I don't think the suspension of the investigation is related to obtaining 4G market (contracts). If De Gucht linked the two things, it is ridiculous".

De Gucht has previously said he had "solid evidence" China illegally subsidized Huawei and ZTE. He won backing, "in principle", from fellow commissioners in May to formally open the investigations.

"The telecoms case, as well as the solar panel dispute, is part of the EU's restructuring of its global industrial chains since 2009.

"Its final goal is protecting its own market in the bloc while opening external markets," said Cui Hongjian, director of European Studies at the China Institute of International Studies.

China's telecoms sector is set to boom because the government has pledged to speed up issuing of licenses for the fourth-generation mobile network this year and accelerate development of broadband Internet access.

Foreign companies have complained that they were being disadvantaged in the business compared with their Chinese counterparts.

"We are not satisfied with the results Ericsson achieved in China Mobile's first-round 4G bidding last year," said Mats H. Olsson, senior vice-president of Ericsson Asia-Pacific, during the 2013 Mobile World Congress held in Spain in February.

Alcatel-Lucent had the largest share, or 14.5 percent, among foreign telecoms gear makers during China Mobile's first round of 4G tenders last year, according to research firm IHS iSuppli.

Ericsson won 8.1 percent of the contracts and Nokia Siemens Networks managed to get 7 percent.

Huawei won a 23.8 percent share and ZTE was awarded 22.1 percent in first-round bidding, IHS iSuppli said.

Chen Peng, analyst with China Merchants Securities Co Ltd, said he expected Huawei and ZTE to gain more than half of the work in China Mobile's 4G tenders.

Cui added the telecoms case may be a signal that China-EU trade friction is moving from industries with low value-added to high-tech sectors.

Fu Jing in Brussels contributed to this story.