ZTE ends ‘operations’ after US export ban
ZTE, one of China’s leading technology companies, has announced it will end “major operations,” after the US government barred American firms from doing business with the telecom equipment maker.
The announcement by the fourth-largest wireless equipment maker in the country comes amid an escalating trade battle between the US and China.
Last month, the Commerce Department barred American firms from exporting parts to the Chinese smartphone company for seven years, saying that ZTE had violated a previous settlement of criminal and civil charges for making illegal shipments to North Korea and Iran.
ZTE said in an announcement last Wednesday that “the major operating activities of the Company have ceased.” ZTE added that the company continues to communicate with the US government with the goal of modifying or reversing the order. But investors were left
ZTE said in an announcement last Wednesday that “the major operating activities of the Company have ceased.”
without a definitive roadmap of the company’s future, according to the announcement.
ZTE did not immediately respond to a request for comment. The suspension of ZTE’s operations follows several recent actions by the US government that hindered its business prospects. The Defence Department last month ordered military exchanges to end the sale of ZTE phones on US bases.
And the Federal Communications Commission has taken steps to ban federal funds from being spent on mobile equipment made by firms that pose a national security threat to US communication networks. ZTE was mentioned in the FCC’s proposal in a section detailing the federal government’s concerns with foreign tech companies.
ZTE’s troubles with the US government are also playing out amid broader fears of an ascendant Chinese tech industry. ZTE had plans to become one of the first vendors in America to offer a smartphone connected to the next- generation wireless network known as 5G.
A host of big technology companies in China are racing to build out this network, sparking concerns from US officials that a shifting reliance on technology developed outside of the US could empower Beijing to hack or spy on American businesses and other institutions.
Earlier this year President Donald Trump ordered Singapore-based Broadcom to abandon its US$ 117 billion ( RM444.6 billion) hostile bid for Qualcomm, citing “credible evidence” that the takeover threatened “to impair the national security of the United States.”