Trump seeks to save Chi­nese jobs at ZTE ahead of trade talks

The Malta Business Weekly - - FRONT PAGE -

China has wel­comed a pledge from Don­ald Trump to help save ZTE, one of China’s big­gest tele­coms com­pa­nies.

The firm has sus­pended op­er­a­tions af­ter the US last month banned Amer­i­can com­pa­nies from sell­ing it com­po­nents. ZTE had ad­mit­ted to mak­ing il­le­gal ship­ments to Iran and North Korea.

But Mr Trump has now tweeted he will work with Pres­i­dent Xi to help ZTE get “back into busi­ness fast”, say­ing too many jobs in China were at risk.

China’s called the com­ments “pos­i­tive”.

“We greatly ap­pre­ci­ate the pos­i­tive po­si­tion of the US on the ZTE is­sue and are in close com­mu­ni­ca­tion with the US on the de­tails of the is­sue,” for­eign min­istry spokesman Lu Kang said.

US com­men­ta­tors say the tone of the tweet is a dra­matic shift for Mr Trump, who has con­sis­tently ac­cused China of steal­ing US jobs.

The con­ces­sion to Bei­jing comes ahead of high-level trade talks later this week in Wash­ing­ton aimed at re­solv­ing an es­ca­lat­ing trade dis­pute be­tween the world’s two largest economies.

Bei­jing has made re­solv­ing the sit­u­a­tion with ZTE, which em­ploys about 80,000 peo­ple, one of its de­mands for striking a broader trade agree­ment with with US.

ZTE was fined $1.1bn af­ter ad­mit­ting, in March 2017, to vi­o­lat­ing US sanc­tions by il­le­gally ship­ping Amer­i­can tech­nol­ogy to Iran and North Korea.

The cur­rent ex­port ban - which lasts seven years - was im­posed last month af­ter the com­pany al­legedly failed to com­ply with its agree­ment.

It was ac­cused of ly­ing about the pun­ish­ment of em­ploy­ees in­volved in skirt­ing the sanc­tions.

US com­pa­nies pro­vide at least a quar­ter of the com­po­nents used in ZTE’s equip­ment, which in­cludes smart­phones and telecom­mu­ni­ca­tions net­work equip­ment.

ZTE spent more than $2.3bn on im­ports from about 200 US com­pa­nies last year.

Dou­glas Ja­cob­son, a lawyer in Wash­ing­ton DC who rep­re­sents some of ZTE’s sup­pli­ers, said: “This is a fas­ci­nat­ing de­vel­op­ment in a highly un­usual case that has gone from a sanc­tions and ex­port con­trol case to a geopo­lit­i­cal one.

“There’s no le­gal mech­a­nism for this. How this will play out re­mains to be seen. They are not sim­ply go­ing to be able to re­sume busi­ness as usual.”

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