The United States has banned ZTE Corporation from selling telecommunications equipment. The company has faced a raft of scandals in the past two years, and the ban is hurting American companies. It is a major supplier of chip technology for Intel and Qualcomm, and purchases telecom equipment parts from American companies. The company has also been hit by a trade war between the United States and China, and the Commerce Department’s ban has put these American businesses at risk.
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Since 1985, the ZTE Corporation has been developing its own equipment, and it has expanded quickly in both domestic and international markets. Today, it has products in over 50 countries, and its CDMA handset won the title of “Famous Chinese Brand” in 2003. In November of that same year, it invited the world-famous artist Li Jet to create an image for its handsets. The company is committed to end-to-end innovation, and is currently listed on the Hong Kong and Shenzhen stock exchanges.
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The recent ZTE deal has highlighted the need for China to make more trade concessions to the U.S., as well as to protect its own technology. It is also an example of the trend of industries moving from the eastern to western regions. The ZTE sanctions are likely to continue. The company has to allow a U.S. compliance team to monitor it and must change its board of directors within 30 days. As a result, the Chinese government may be under pressure to make more concessions to the United States.
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