U.S., China Edge Closer to Ending ZTE Ban
* Broader framework of agreement could see ZTE forced to make more management changes, pay more fines, reports say
* Source close to company says ZTE could collapse if U.S. ban isn’t lifted within two months of when it was imposed
(Beijing) — Washington is aiming to lift crippling sanctions against ZTE Corp., a move previously hinted at by U.S. President Donald Trump, as the embattled telecom giant fights for its life, a source close to the company told Caixin.
Washington and Beijing had agreed on the broader framework of a deal to end the sanctions, though details were still being finalized, The Wall Street Journal reported, citing unnamed sources with knowledge of the matter in both countries. Such a framework could see ZTE forced to make major management changes, including to its board, and possibly pay more fines, the report said.
The U.S. Department of Commerce said in mid-April it would cut off ZTE, whose main products include smartphones and networking equipment, from its American suppliers as punishment for previous sales of American-made products to Iran. The U.S. had earlier declared such sales illegal under sanctions aimed at pressuring Iran to curtail its nuclear program.
ZTE officials have been spending the roughly five weeks since that time crafting contingency plans, including a potential management reshuffle and how to restart the company’s business if and when the ban is lifted, according to another source close to the company. ZTE announced two weeks ago that it had halted its main business operations as a result of the sanctions.
“It’s as if a person’s heart had stopped beating, but there’s still blood flowing through his veins,” a source close to the company previously told Caixin, describing the severity of the company’s condition. He forecast the company could collapse if it were to fail to get the U.S. ban lifted within two months of when it was first imposed.
The U.S. had originally found ZTE guilty of the illegal sales in 2016, but suspended a threatened seven-year ban on its purchase of American-made components after the two sides reached a settlement that included a fine of nearly $1 billion. But this year, the Commerce Department, which is overseeing the matter, determined ZTE had failed to live up to all its commitments, citing instances of employees who were not punished adequately. As a result, it reimposed the seven-year ban.
The issue was later drawn into broader discussions between Washington and Beijing, as the former put pressure on the latter to reduce their large trade imbalance. Trump earlier tweeted that he hoped the U.S. could find a positive resolution for ZTE’s case, though the matter wasn’t mentioned when the two sides announced a broader new trade agreement over the weekend.
A ZTE spokesperson had no comment on the situation.
ZTE’s Shenzhen- and Hong Kong-listed shares have been suspended since the crisis began.
Feb 17 17:15
Feb 17 14:38
Feb 17 13:20
Feb 17 12:20
Feb 15 11:02
Feb 14 18:07
Feb 14 13:36
Feb 14 10:42
Feb 13 13:34
- 1Coronavirus Latest (Feb. 1 - 15): Cases Surge Past 66,500 as France Reports First Death
- 2Coronavirus Study Finds Incubation Period of Up to 24 Days
- 3Even With Massive Funding, Coronavirus Vaccine Isn’t Coming Soon
- 4Coronavirus Sunday Update: Taiwan Reports First Death, Wuhan Virology Institute Denies Rumors
- 5Intensive Care Doctor Tells of a Hospital Teetering on Collapse in Wuhan
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas