ZTE speaks out against ‘unacceptable’ USA ban

Chinese telecom equipment maker ZTE Corp said on Friday a us decision to impose sanctions on the company was unfair and threatens the survival of the technology giant as it pledged to safeguard its rights through all legal means.

A USA ban on sales of American components to ZTE Corp (0763.HK) (000063.SZ) has unleashed a patriotic backlash in China’s cyberspace, highlighting the growing tension between the world’s two largest economies. Preventing companies like Qualcomm from supplying ZTE with the electronics that it needs to continue manufacturing phones. Instead, ZTE fell foul of Washington for the second time in a year, inciting a moratorium on purchases from United States suppliers and dealing a devastating blow to its global ambitions.

China is well prepared to handle any negative effects from its trade dispute with the United States, the commerce ministry said on Thursday, adding that Beijing’s tariff hikes on USA imports will not have a big impact overall on its domestic industries.

We can always file this U.S. vs. ZTE brawl as one more episode of the escalating trade war with China. What it doesn’t talk about is the use of an open source operating system that also happens to make heavy use of Google services.

The company has spent billions of dollars licensing technology from USA partners, he said. “But there is no provision now for that to occur”.

On Friday, a Chinese foreign ministry spokeswoman criticized USA restrictions on trade and investment in technology as attempts to shield itself from competition.

That move comes not long after Trump imposed tariffs and strict trade measures on China in an apparent attempt to hamstring the foreign adversary, and win a so-called “trade war”.

The case has drawn global attention because it comes as U.S. President Donald Trump spars with Beijing over accusations that China steals American intellectual property and that products like ZTE’s smartphones could pose a national security risk.

ZTE said its board postponed a meeting to approve the results while it reviews the order.

The Treasury investment restrictions are aimed partly at pressuring China to lift requirements for foreign companies to form joint ventures with local firms that lead to technology transfers, a policy the administration deems unfair when the United States has no such restrictions on Chinese firms.

It added that it also worked with an independent official designated by the U.S. government to monitor ZTE’s implementation of agreements with the United States government.

Most ZTE phones sell for below $300, a low-end segment of the USA market, ZTE’s mobile chief executive, Lixin Cheng, told Reuters in January.

Meanwhile, the company’s former chairwoman Sun Yafang worked in China’s Ministry of State Security, an intelligence and security agency, for many years before joining Huawei in 1992, according to Chinese media reports. Additionally, it wasn’t as dependent on Qualcomm as ZTE, mostly due to its own system-on-chip (SoC) making prowess.