China's ZTE protests U.S. ban


China's ZTE Corp. has blasted the USA government decision to impose a seven-year ban on its purchases of crucial American components, calling the move "extremely unfair" and "unacceptable".

ZTE shipped 46.4 million smartphones a year ago, placing it seventh among Android-based manufacturers, according to research firm IHS Markit.

Why is this ban in place?

"That is extremely unfair toward ZTE and we can not accept it", the statement said.

The Financial Times says the US Treasury may use an emergency act to prevent China from investing in some industries, such as semiconductors.

The feud between the Department of Commerce and ZTE comes as Chinese mobile companies like Huawei and ZTE are coming under scrutiny from the USA government over safety concerns and amid a potential trade war between the US and China.

The statement gave no indication what legal steps ZTE might take.

According to the USA, this was in violation of a settlement in March 2017 that encompassed ZTE's agreement to a seven-year suspension of export sales if it broke additional conditions, including carrying out disciplinary action against executives responsible for the equipment sale to the two countries. The Chinese company claims that they spent over United States dollars $50 million in export control and compliance a year ago. The Chinese brand's statement emphasized its responsibility and determination to challenge the ban.

Established in 1985, ZTE provides technology and products to clients in more than 160 countries and regions.

It was also likely prompted by the U.S. Department of Commerce's recently announced policy banning American companies from doing business with ZTE, a Chinese tech giant, for the next seven years.

However, the Chinese manufacturer faces an uphill struggle.

That goal has been given fresh urgency after a USA ban on sales of products - including chips - to Chinese phone maker ZTE Corp roiled the firm, which uses mainly U.S. chips in its smartphones.

"Trying so hard, bearing so much, all to fight for China's interest - how touching!" said one popular comment that played on a comparison with a late Qing dynasty official, Li Hongzhang, a chief negotiator in the first Sino-Japanese war.

"If ZTE can not have these Google applications, ZTE phones will be a lot less attractive", said Kaur. For ZTE fans in the USA, they could see the Chinese brand pushed out of their market.

That over-reliance has spooked China - though most industry insiders said shifting production back home would not be easy. An aggressive approach from the United States could stimulate Chinese efforts to develop more effective home-grown chips, but also make things harder for American companies to do business within China's sphere of influence.