SOURCE / ECONOMY
As US targets Chinese cable firm, experts say sanctions lose marginal effect
Published: Aug 10, 2022 09:00 PM
ZTE

ZTE

Chinese experts on Wednesday blasted the US' constantly escalating crackdowns on Chinese high-tech companies, saying the US' trick of sanctioning firms is losing its marginal effect, after a Chinese wire and cable maker was reportedly accused by the US government of "violating US export controls."

The US Commerce Department on Tuesday issued administrative charges against China's largest wire and cable manufacturer, Far East Cable Co, citing so-called violations of US export controls by "helping telecoms company ZTE deliver restricted technology to Iran," the Wall Street Journal reported.

Far East Cable Co signed a contract with ZTE "in an effort to conceal the telecommunication company's business with Iran, which relied on US-origin routers and microprocessors," the report said, citing an official charging letter.

Far East Cable Co issued a statement and the attached complaint letter on Thursday against the US Department of Commerce, saying that related allegations by the US department violate the principle and spirit of fairness and justice.

Far East Cable said on Thursday that it has been in active communication with the US Department of Commerce since the latter's first complaint in September 2019, which was dropped in June 2021. But now, more than a year after the US Commerce Department dropped the charges, Far East Cable is once again the target of US administrative action.

Related facts and details remain to be confirmed, but the US' interminable trick of attacking Chinese firms has seen diminishing marginal effect and will not lead to much impact on either ZTE or Far East Cable, Xiang Ligang, director-general of the Beijing-based Information Consumption Alliance, told the Global Times on Wednesday.

"Some firms, like ZTE, seem to have reached settlements with the US government and Washington's so-called oversight has ended, but as a matter of fact, the US is still watching them, in various ways," Xiang said.

A US judge in March ruled to end a five-year probation period of ZTE for alleged violations of US sanctions on Iran.

By continuing to watch ZTE, the US might not only intend to spot anything not favoring Washington's interests, but also use it as hostage to extend a psychological deterrent over China and Chinese firms, Xiang noted.

However, it is anything but an easy task for Washington to get its way now, since Chinese companies have been making preparations to deal with the US' bullying, including stocking up raw materials and enhancing core technologies, Xiang said.

For Far East Cable Co, Xiang said that the potential US crackdown will not have much impact on the company, given that Chinese firms have developed cutting-edge cable technology across the world with independent technology and skills.

According to the statement issued by Far East Cable Co on Thursday, after a thorough evaluation of the case, it was concluded that the incident will have no material adverse impact on the company.

Far East holds 787 authorized patents, including 156 patents for invention, according to the company.

Its parent company Far East Smarter Energy Co, which fully owns Far East Cable, Wednesday night revealed its half-year financial results. In the first half of 2022, the operating revenue of the company's intelligent cable network reached 9.069 billion yuan ($1.35 billion), up 15.44 percent year-on-year. 

The US has been wielding unilateral sanctions over other countries or regions, and threatening firms and institutions around the world to comply with its sanctions, experts said, adding that ZTE is only one of the victims of the US' sanctions.

ZTE is one of the leading players in the 5G technology sector. In addition to a massive layout of 5G base stations, network establishment, and terminal products development, the company has been rolling out tailored applications for industries from steel, transportation, mining, digital cities, culture and tourism, to the media and other industries.

In 2021, ZTE reported revenue of 114.5 billion yuan, up 12.9 percent year-on-year, and net profit of 6.81 billion yuan, up 59.9 percent. Both figures set new highs.

Global Times