ZTE operating normally; complies with law

By Huang Ge Source:Global Times Published: 2016-3-6 23:18:31

US firms ‘more affected’

Delegates look at the ZTE products on display on the ZTE Corp stand at the Mobile World Congress in Barcelona, Spain, on February 22. Photo: CFP

China's second-largest telecom equipment maker ZTE Corp is now operating normally and is evaluating the impact on the company posed by a US Commerce Department decision, the company said in a statement sent to the Global Times on ­Sunday.

ZTE said it has noted some media reports saying that the company faces US export restrictions.

Reuters reported Saturday that the US Commerce Department is set to place export restrictions on ZTE for allegedly selling embargoed US technology products to Iran.

ZTE closely complies with international industry rules as well as the laws of foreign countries, the statement said.

Experts said that the restrictions will have more effect on US product makers than on ZTE.

US suppliers are required under that country's restrictions to apply for an export license before shipping any US-made equipment or parts to ZTE, which will make it hard for the Chinese company to purchase US products, according to the Reuters report.

The license applications will generally be denied, said a notice that will be released by the US Commerce Department sometime this week, the report noted.

The restrictions will take effect on Tuesday, Reuters noted, and they will apply to any company across the world that wants to ship US-made products to ZTE.

ZTE can appeal the action, according to Reuters.

The restriction will have a limited impact on the domestic telecommunications titan as its US suppliers are limited, Zhang Yi, CEO of iiMedia Research Institute, a mobile Internet consulting agency, told the Global Times on Sunday.

It seems that US product makers will be affected more than the Chinese company, Zhang noted. "Given the current economic situation in the US, the country is eager to sell its products and technology to the world and ZTE is one of its big clients that will provide good profits to these US firms," he said.

Fu Liang, a Beijing-based IT expert, agreed with Zhang's view, saying that the Chinese company is interdependent with the US product makers, not only in terms of parts and products, but also technology.

"As ZTE sells its telecom equipment and terminal machines to the US market, the business, to some extent, will also be affected due to the Commerce Department's decision," Fu told the Global Times on Sunday.

The US Commerce Department launched investigations into ZTE's alleged violation of US export controls on Iran following media reports in 2012 that "the company had signed contracts to ship millions of dollars worth of hardware and software from some of America's best-known tech firms to Iran's largest telecom carrier, Telecommunication Co of Iran (TCI)," Reuters said.

The US product producers, including Microsoft Corp, IBM, Oracle Corp and Dell Inc, have all said they were not aware of ZTE's contract with TCI, Reuters said. It is not clear if any of these companies still do business with ZTE, said the report.

ZTE will no longer seek new customers in Iran and limit business activities with existing customers, according to a statement released in March 2012 on the company's website, right after media reports said the company shipped US-made technology products to Iran despite US sanctions on the country.

Subsequently, ZTE Chairman Hou Weigui said that the company had halted business in Iran, although it had to continue to provide services for products previously sold to customers in the country, the Xinhua News Agency reported in April 2013.

Founded in 1985, ZTE Corp operates in 160 countries and regions in the world, the company's website showed.

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