[Continuous Updates] Slugfest between China and US over ZTE ban
ZTE has been all over the news for the past day or so courtesy of the US ban which restricts American firms from selling “Commodity, Software or Technology” to the Chinese company for the next seven years. So how does the ban affect ZTE? How is China responding to the development? Here, in this story, we track all news related to the matter in chronological order.
ZTE could be blacklisted in Australia
A report out of Australia is suggesting that ZTE could be blacklisted by the Australian government as well. After Huawei, “security agencies are also examining the decisions around ZTE,” the report says.
China hits back, slaps new tariffs
In what can be seen as an initial Chinese response to US’ ban on ZTE, the Asian country has effectively slapped US sorghum producers a 178.6 percent deposit.
【用高粱实施临时反倾销措施】中共为报复美国惩罚ZTE ，指责美国倾销高粱到中国。中共说将征收179%的费用(不是关税)！ 去年中共从美国进口价值9亿6千万的高粱，用于制酒。——看来酒类要涨价了。想不通的是，中兴被整了，中共为啥不去整苹果和高通呢？干嘛老是拿粮食说事儿。 pic.twitter.com/vod8yR0EUB
— 李子佛 (@lizife) April 17, 2018
On the face of it, the measure – which has been taken in anticipation of anti-dumping tariffs – directly affects Chinese importers, but it’s fairly clear that it’s the US producers of sorghum who will ultimately bear the brunt.
It’s worth mentioning that most US states where sorghum is grown backed president Trump during elections. So it’s reasonable to say this move by China hits the US where it’ll hurt the most.
Chinese Ministry of Commerce has issued a formal statement on the matter, saying:
China has always asked Chinese enterprises to abide by the host country’s laws and policies and operate legally and properly in the process of overseas operation
ZTE has launched extensive trade and investment cooperation with hundreds of American businesses, and contributing tens of thousands of jobs to the United States
[We are] ready to take necessary measures to safeguard the legitimate rights and interests of Chinese enterprises
How ZTE ban affects China?
The seven year ban imposed by the US on ZTE could have far reaching affects. Given that ZTE has been actively involved in the development and commercialization of 5G-related technologies in China. The ban could severely hit the Chinese government’s plan to build the largest 5G network in the world, something which China was aiming to complete by the end of 2020.
Did ZTE know beforehand about a possible ban?
Well, Forbes says their sources have told them the Chinese company was aware that this crisis may crop up. Here’s the exact statement:
According to our sources, ZTE was aware of the possibility of the US ban decision as early as last January, during CES 2018
ZTE may lose Android license as well
If you go by the exact terminology used in the US ban order, you’ll see the word ‘software’ in it. This means the company will likely lose its access to Google’s Android OS as well. A fresh Reuters report (citing sources) says that this is likely to happen, although officially both ZTE and Alphabet (Google’s parent company) are currently discussing the technicalities of the order.
Meanwhile, a new report from Bloomberg says the company is also evaluating software options for its smartphones.
There are also speculations about whether or not the ban extends to intellectual property licenses (like those from Qualcomm over 3G and 4G tech). If that happens, then it’s safe to say ZTE as we know would soon be dead.
ZTE Chairman appeals for calm
ZTE chairman Yin Yimin has appealed the company’s 80,000 strong employee force to maintain calm. In a leaked internal memo, the executive said they are treating the situation as crisis, and handling it accordingly.
The company takes the US ban seriously and has immediately set up a crisis team, with every division analysing and coming up with measures to deal with the crisis
We need the combined strength of ZTE’s 80,000-strong staff in this tough time. I would like to appeal to all employees to maintain a state of calm, to man one’s post and do one’s job well. The company is actively communicating and giving its all to resolve this crisis
Another big blow: UK says ZTE poses national security risk
As if the 7 years ban in the US wasn’t enough, UK’s cyber-security watchdog National Cyber Security Centre (NCSC) has warned companies to avoid working with ZTE, saying the company (it’s products) are a potential risk to national security.
NCSC assess that the national security risks arising from the use of ZTE equipment or services within the context of the existing UK telecommunications infrastructure cannot be mitigated
ZTE share trading suspended
Yes, ZTE has suspended share trading in Hong Kong and Shenzhen, the two stock exchanges where it’s listed. The company said it would have to assess the “full range of implications” of the ban.
Stay connected with us on Twitter (@PiunikaWeb) to hear about all related developments as and when they occur