China and US said to agree on outline to resolve ZTE ban

BEIJING: China and the US have agreed on the “broad outline” of a settlement to the seven-year ban on ZTE Corp buying American technology, ending a punishment that threatened to put the company out of business, the Wall Street Journal reported.

The details are still being worked out but would include major changes to management, the board and potentially significant fines, the newspaper said yesterday, citing unidentified people familiar with the matter. Larry Kudlow, President Donald Trump’s top economic adviser, said on the weekend that similar measures would be needed before the US would consider a reprieve.

ZTE has been forced to halt major operations after the US slapped a ban on China’s second-largest maker of phone networking equipment for violating a settlement on breaching sanctions and then lying about it. Last week, Trump posted a tweet saying he was working with Chinese President Xi Jinping to help ZTE “get back into business, fast”.

While ZTE was being punished over the sales to Iran, the ban has become entwined in the trade dispute between the US and China. The Shenzhen, China-based company, which employs about 75,000 people, depends on US components, such as chips from Qualcomm Inc, to build its smartphones.

ZTE ran into trouble in 2016 for violating US laws restricting the sale of American technology to Iran. — Bloomberg