ZTE strat­egy stays de­spite reshuf­fle

China Daily (Canada) - - ACROSS AMERICAS - By GAO YUAN in Bei­jing gaoyuan@chi­nadaily.com.cn

ZTE Corp, a Chi­nese telecom equip­ment and smart­phone maker, has reshuf­fled its top ex­ec­u­tive team just weeks af­ter the United States sanc­tioned the com­pany for al­leged ex­port vi­o­la­tions.

Shi Lirong, who has led ZTE’s over­seas ex­pan­sion as pres­i­dent and chair­man since 2010, is step­ping down, to be re­placed by Zhao Xian­ming, its chief tech­nol­ogy of­fi­cer, the Shen­zhen-based com­pany said in a state­ment.

The com­pany has also ap­pointed seven new ex­ec­u­tive vice-pres­i­dents, in­clud­ing Zeng Xuezhong, head of hand­set busi­nesses.

The chang­ing of the guard comes af­ter the US Com­merce De­part­ment an­nounced it was block­ing US com­pa­nies from sell­ing com­po­nents to ZTE, claim­ing the Chi­nese com­pany sold pro­hib­ited items to Iran.

The US gov­ern­ment has since said it would ease the re­stric­tions un­til the end of June and could fur­ther ease them if ZTE co­op­er­ated in “re­solv­ing the mat­ter”.

“The new man­age­ment team will con­tinue work on in­no­va­tion and global ex­pan­sion, and will fol­low the high­est-level in­ter­na­tional busi­ness prin­ci­ples,” said the state­ment.

Shares in ZTE, traded on the Shen­zhen Stock Ex­change, have been sus­pended since early March. The com­pany is due to an­nounce full-year re­sults on Wed­nes­day.

An­a­lysts sug­gested the US sanc­tions trig­gered Shi’s de­par­ture, although the com­pany in­sisted the mat­ters are not re­lated.

James Yan, re­search di­rec­tor at Coun­ter­point Tech­nol­ogy Mar­ket Re­search, said re­plac­ing Shi was the right call for ZTE be­cause the com­pany can­not af­ford to miss out on the US as a key growth op­por­tu­nity.

“The core man­age­ment team in the US is in­tact, which is a good thing for ZTE be­cause they still have the knowhow to han­dle ev­ery­day oper­a­tions,” Yan said.

Milly Xiang, a telecom an­a­lyst with re­search firm In­ter­na­tional Data Corp, also said the man­age­ment changes will have lim­ited im­pact on ZTE’s strate­gies, most of which were drawn up as early as in 2014.

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