Chinese commerce ministry urges US to handle ZTE issue in line with law

Source:Global Times Published: 2018/4/17 11:13:39

The Chinese Ministry of Commerce (MOFCOM) will take necessary measures to protect the legitimate interests of Chinese companies, the ministry's spokesperson said in response to the US' latest ban on Chinese telecom equipment producer ZTE Corp.

The US Department of Commerce has banned American companies from selling components to ZTE for seven years after the Chinese company allegedly broke an agreement, Reuters reported on Monday (US time), citing US officials.

The ban is reportedly the result of the Chinese company pleading guilty to failing to comply with an agreement it signed with the US government in which it was prohibited from violating US sanctions by shipping US goods and technology to Iran, according to Reuters.

ZTE has carried out cooperation with hundreds of US companies, creating hundreds and thousands of local jobs, the MOFCOM spokesperson noted. The ministry then urged the US to handle the issue in line with the law, and create a fair and stable environment for Chinese companies.

In response to the US' ban, ZTE said the company is aware of the denial order activated by the US Department of Commerce.

At present, the company is assessing the full range of potential implications that this event has had on the company and is proactively communicating with relevant parties, the company told the Global Times Tuesday morning.

In the long term, the Chinese telecom carrier will have to diversify its sourcing partners around the globe, which may hedge its investment in the US market, Fu Liang, a Beijing-based industry analyst, told the Global Times. "While looking for more partnerships in regions and countries such as Europe, Japan and South Korea, the Chinese company will have to further enhance its self-supply capabilities in core electronic components," he said.

"What ZTE can do for now is gather evidence to show that the US' accusations are groundless, and to bring the case to court," Fu added.

Furthermore, this latest move by the Trump administration reflects its contradictory mindset, the analyst noted. "On the one hand, it has vowed to work on the trade deficit with China, on the other hand, it has banned US companies from shipping their products to China, which is unlikely going to work out," he said. 



 



Posted in: COMPANIES

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