(Original caption: US arrived deal to keep China's ZTE in business: congressional aide)
Netease Technology News May 26, according to Reuters, a senior US Congress aide revealed on Friday that the Trump administration told US congressmen that the U.S. government has reached an agreement with ZTE to allow the latter to revert to the U.S. The company's business contacts.
Similar to earlier statements earlier this week, the proposed agreement immediately encountered resistance in the United States Congress. Democrats and Republican lawmakers in the U.S. Congress have accused Trump of succumbing to pressure from China and have eased pressure on companies that pose a major risk to U.S. national security.
In April of this year, the U.S. Department of Commerce prohibited ZTE from buying components from the U.S. market for a period of 7 years because it violated the U.S. government sanctions ban. Now, the company will be allowed to resume business with U.S. companies including chip maker Qualcomm.
The Congress aide said that the agreement was conveyed by the U.S. Department of Commerce to officials of the U.S. Congress. The agreement requires ZTE to pay a large fine, to be stationed at the US Compliance Officer at ZTE, and to replace the company's management team. The U.S. Department of Commerce will then lift the ban on ZTE’s purchase of U.S. products.
On Tuesday, Trump put forward a plan to impose a fine of up to 1.3 billion U.S. dollars on ZTE and restructure its management as a condition for the U.S. government to withdraw the severe punishment measures that had allowed ZTE to run into trouble.
The White House did not immediately confirm that it had reached a new agreement with ZTE, but a spokeswoman said: “This is an enforcement action that the Ministry of Commerce is responsible for. We are ensuring that ZTE is responsible for the violation of U.S. sanctions and will pay a heavy price. We are protecting our security infrastructure and U.S. jobs."
ZTE is a listed company, but its largest shareholder is a Chinese state-owned enterprise. Last year, following an agreement with the U.S. government, the company agreed to pay nearly $900 million in fines and open books to U.S. regulators.
According to a person familiar with the matter, the company has lost more than US$3 billion since it was banned from doing business with US suppliers on April 15.
In response to the U.S. government’s reconciliation with ZTE, US Republican Senator Marco Rubio wrote on Twitter: “Yes, they reached an agreement. This is a big deal. The transaction .... China has no mercy on US companies and they use these telecommunication companies to monitor and steal us.
Rubio and Democrats Senators Chuck Schumer and Chris Van Hollen both stated that the US Congress should take action to stop Trump from allowing ZTE to re-operate with U.S. companies. contacts.
The Chinese government has always demanded that the United States withdraw its sanctions against ZTE. This is part of a broader agreement to prevent a trade war between the world’s two largest economies. US Commerce Secretary Wilbur Ross plans to visit China next week to conduct a new round of negotiations on trade issues between the two countries.
ZTE's mobile phone and network equipment products can not be separated from US parts. It is estimated that 25% to 30% of ZTE's equipment is provided by U.S. companies.
As part of the agreement reached with the U.S. government last year, ZTE laid off four senior employees.
On Friday, ZTE’s U.S. supplier stocks rose sharply. Shares of optical networking equipment maker Acacia Communications Inc. rose 4.4%, and 30% of the company’s 2017 revenue came from ZTE; optical component company Oclaro Inc.’s share price rose 2.7%, and the company’s 2017 revenue includes 18% came from ZTE. (Liu Chun)
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