ZTE Barred from Buy­ing Com­po­nents from US Com­pa­nies

NewsChina - - NEWS BRIEF -

Chi­nese telecom­mu­ni­ca­tion gi­ant Zhongx­ing Telecom­mu­ni­ca­tion Equip­ment Cor­po­ra­tion (ZTE), has been barred from buy­ing com­po­nents and parts from Amer­i­can com­pa­nies as the trade con­flict be­tween China and the US in­ten­si­fies.

Ac­cord­ing to me­dia re­ports, the seven-year ban was an­nounced by the US Depart­ment of Com­merce (DOC) on April 16. The DOC claimed to have im­posed the penalty due to ZTE'S vi­o­la­tion of US sanc­tions on Iran and the com­pany's at­tempt to con­ceal their ac­tiv­i­ties.

ZTE sus­pended trad­ing in the wake of the ban, with other rel­e­vant stocks plung­ing in price.

Given that a ma­jor­ity of ZTE'S prod­ucts need high-end chips im­ported from US sup­pli­ers, the ban is widely seen as a heavy blow to the com­pany, which could sig­nif­i­cantly dent its ef­forts in 5G in­no­va­tion.

China's Min­istry of Com­merce re­sponded on April 17 that it would watch the ban closely and take any mea­sures nec­es­sary to pro­tect the le­gal rights and in­ter­ests of Chi­nese firms.

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