China to back ZTE if necessary amid 7-year US tech cut-off
2018-04-17 14:03:00

Chinese telecom equipment maker ZTE has said it is "assessing" the repercussions of a denial order from the US Department of Commerce, with China saying it will safeguard the interests of its firms.

ZTE said in a statement on Tuesday that it was looking at "the full range of potential implications that this event has on the company," with the denial order banning US firms from selling components and technology to the firm for seven years.

The Shenzhen-based company earlier suspended its Hong Kong-listed shares to protect itself from a crash in its stock price.

The denial order prohibiting US companies from exporting technology to ZTE was initiated Tuesday by the US Department of Commerce.

The US side cited repeated false statements made by ZTE to the US government, after it was punished for violating US sanctions against Iran and the Democratic People's Republic of Korea (DPRK).

In addition to a record 1.2 billion US dollar fine, ZTE in March last year agreed to comply with a seven-year denial of export privileges, which would be activated if it failed to comply with agreements reached at the time.

As uncertainty gathers over what the denial order means for the telecoms giant, China’s Ministry of Commerce (MoC) on Tuesday said it will closely observe developments, and is prepared to take necessary measures to safeguard the interests of Chinese companies overseas.

The MoC highlighted how ZTE has engaged in extensive investment and cooperation agreements with hundreds of US companies, creating tens of thousands of jobs.

The MoC, in a statement on its website, added further that it hopes the US deals with the matter rationally and in accordance with the law.

The consequences of the ban, if unresolved, could be very serious for ZTE, as 20-30 percent of the components used in its devices are supplied from the US.

Chinese telecoms and smartphone makers such as ZTE and Huawei have frequently come under fire in the US over alleged security issues, with a group of US intelligence chiefs advising consumers last month against the use of Chinese smartphones made by the two Chinese manufacturers, accusing them of misusing private information.

The UK has joined the US in labeling ZTE a security risk, with the National Cyber Security Centre warning telecoms providers not to use ZTE components on Monday.

The US denial order comes against the backdrop of proposed US tariffs worth 100 billion US dollars on Chinese imports, which were announced earlier this month by US President Donald Trump.

The White House claims the tariffs would address areas like information and communication technology, which the US accuses China of ‘unfairly’ advancing by using US technology and intellectual property.

China has repeatedly called for dialogue with the US to resolve any differences, with trade tariffs damaging for the global economy. Chinese Ambassador to the US Cui Tiankai said on Monday that US politicians should "make the right choice at the crossroads of history."

Source:CGTN Editor:Hiram
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