US ZTE ban sparks Chinese to rally around company

Apr 20, 2018, 00:50
US ZTE ban sparks Chinese to rally around company

The US has sanctioned Chinese telecoms equipment maker ZTE for violating export regulations and making false statements to the US government, said the US Department of Commerce earlier this week.

ZTE, a maker of telecommunications equipment and smartphones, was due to release results on Thursday.

According to Reuters' story, ZTE and Alphabet have yet to determine whether the Commerce Department's order would preclude ZTE from using Android (again, they likely mean Android with GMS) on its smartphones. "It's rare that you go from A-OK to no transactions overnight".

The seven-year ban on USA firms selling parts to ZTE comes at a time when the two countries have threatened each other with tens of billions of dollars in tariffs in recent weeks, fanning worries of a full blown trade war.

Previously fined for shipping telecoms equipment to Iran and North Korea and paying full bonuses to employees involved in such illegal activities, ZTE did not reprimand those staffers and repeatedly lied to the U.S. government about such practices, said Secretary of Commerce Wilbur L. Ross, Jr.

One state-run Chinese newspaper, the Global Times, said in an article this week that the USA actions against ZTE is a cause for China to bolster its production of smartphone chips.

China's Ministry of Commerce responded to the ban quickly, saying it will take necessary measures to protect the interests of Chinese companies.

The final say over whether ZTE is still able to use Android will likely rely on U.S. regulators.

ZTE is now being sanctioned for selling phones with United States made components in Iran.

Washington has not included any "off ramp" under the terms of this week's order, the official said.

Although Google's Android operating system - which Huawei and ZTE rely on to power their smartphones - is an open source software, a number of Google's key apps aren't, and neither is access to the Google Play Store.While Huawei appears to have given up on the American mobile market, at least in the short term, the new actions would likely severely damage ZTE's mobile sales in the USA, where it has achieved a 12 percent market share in just three years, Plouffe added.

Last year ZTE shipped 46.4 million smartphones ranking seventh globally out of Android-based manufacturers and commanding around 12 percent of the U.S. market.

Google declined comment and ZTE did not respond to requests to comment.

He said while potential security threats stem from Huawei and ZTE's close relationships with the Chinese government, similar concerns could be applied to any other infrastructure supplier where hardware can be compromised with backdoor access.

The world's telecom giants due to do battle over licences for 5G wireless technology [/ame-cRepCRights] Despite the apparent security threat from Huawei and ZTE's technology, neither the USA of Britain has recommended that the two firms' hardware be immediately removed.

Visitors are seen at a booth of Chinese telecom equipment maker ZTE Corp at an expo in Beijing, China September 27, 2017.

ZTE, which has chips from USA firm Qualcomm in an estimated 50-65 percent of its phones, is now facing a struggle to save its smartphone business as it looks to find new supplies. United Kingdom concerns regarding ZTE are similar to ones that the US Government has against Chinese equipment providers (including Huawei) and are mostly centered around claimed links to the Chinese government and new laws that allow them to pressure local companies in ways that could be used for foreign surveillance or penetration. "We will continue to monitor the situation closely". According to a Reuters report, the ruling may, in fact, end up costing ZTE its Android license.

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