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ZTE-US case: Govt ready to protect rights of Chinese companies

By Ma Si | chinadaily.com.cn | Updated: 2018-04-17 10:00
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Visitors drop by ZTE's booth at the MWC Americas 2017 in San Francisco. [Photo by Lia Zhu/China Daily]

The Ministry of Commerce said on Tuesday that China stands ready to take necessary measures to safeguard the legitimate rights and interests of Chinese companies.

The comments came in response to media reports that the US is banning American companies from selling components to leading Chinese telecom equipment maker ZTE Corp for seven years for violating the terms of a sanctions violation case.

ZTE Corp, a leading Chinese telecom equipment vendor, has conducted extensive trade and investment cooperation with hundreds of US companies and contributed tens of thousands of jobs to the United States. It is hoped that the United States will properly handle the matter in accordance with regulations and create a fair, equitable and stable legal and policy environment for the enterprise, the ministry said in a statement.

The ministry will pay close attention to the progress of the situation and stands ready to take necessary measures to safeguard the legitimate rights and interests of Chinese companies, it added.

ZTE said "It is assessing the full range of potential implications that this event has on the company and is communicating with relevant parties proactively in order to respond accordingly."

The company's share trading in Hong Kong and Shanghai was suspended on Tuesday.

The Chinese company, a top smartphone seller in the United States, pleaded guilty last year in federal court in Texas for conspiring to violate US sanctions by illegally shipping US goods and technology to Iran. It has already paid $890 million in fines and penalties, with an additional penalty of $300 million that could be imposed.

But the US Department of Commerce alleged that ZTE has not fulfilled its promise of disciplining 35 employees by either reducing their bonuses or reprimanding them in a wide part of punishment measures.

China International Capital Corp Ltd said in a research note on Tuesday that if ZTE and the US government cannot reach a settlement within one or two months, it will have a negative effect on the global telecom network construction and it is even likely to influence the building of 5G network in future.

ZTE accounts for about 10 percent of the global telecom equipment market, and 30 percent of the Chinese telecom market. ZTE currently has equipment in stock for one or two months, which leaves a time frame for negotiations. The matter needs to be properly handled as soon as possible, China International Capital Corp Ltd added.

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