ZTE company stops business because of US sanctions.

[William Gaatjes]

It will not be long anymore(maybe 1 or 2 decades) that China will be fully independent technologically and then the US has no control anymore. Also, China has a lot of dollars stored.
Trump is not being smart. If these kind of actions continue, what would happen when China is no longer dependent on the US when it comes to electronic components and starts dumping dollars on the global market as well?


https://ca.reuters.com/article/businessNews/idCAKBN1IA1XF-OCABS

HONG KONG (Reuters) - ZTE Corp’s (0763.HK) (000063.SZ) main business operations have ceased due to a ban imposed by the U.S. government, but China’s second biggest telecom equipment maker is trying to have the ban modified or reversed, it said on Wednesday.

FILE PHOTO: A ZTE smart phone is pictured in this illustration taken April 17, 2018. REUTERS/Carlo Allegri/Illustration/File Photo
ZTE was hit by a ban last month from Washington, forbidding U.S. firms from supplying it with components and technology after it was found to have violated U.S. export restrictions by illegally shipping goods to Iran.

“As a result of the Denial Order, the major operating activities of the company have ceased,” ZTE said in the exchange filings late on Wednesday.

“As of now, the company maintains sufficient cash and strictly adheres to its commercial obligations subject in compliance with laws and regulations,” it said.

The U.S. action, first reported by Reuters, could be devastating to ZTE.

As one of the world’s largest telecom equipment makers alongside Huawei [HWT.UL], Ericsson (ERICb.ST) and Nokia (NOKIA.HE), ZTE relies on U.S. companies such as Qualcomm (QCOM.O) and Intel (INTC.O) for up to a third of its components.

Analysts have said it will be hard for ZTE to stay competitive even if it could find non-American suppliers.

Taiwanese semiconductor company Mediatek (2454.TW) said last week it had received a permit from the Taiwanese government to continue to supply ZTE.

ZTE said it was actively communicating with the U.S. government “in order to facilitate the modification or reversal of the Denial Order by the U.S. government and forge a positive outcome in the development of matters.”

The ban that threatens to cut off ZTE’s supply chain came amid heightened tension over a possible U.S.-China trade war. The Chinese government raised the issue of ZTE last week with a visiting U.S. trade delegation.

ZTE said on Sunday it had submitted a request to the U.S. Commerce Department for the suspension of the ban.

ZTE appears to have suspended its online stores on its own website as well as on Alibaba Group’s e-commerce platform Taobao over the past few days, which display a “page being updated” message with no products to order.

The Chinese firm did not respond to calls and messages from Reuters seeking comment.

Consumer Cellular Inc, a U.S. wireless operator, said ZTE was unable to continue supplying phones after the sanctions, but had asked the company to hold inventory spots open as it worked to resolve the export ban, said Consumer Cellular Chief Executive John Marick in an interview.

Marick said ZTE has not given guidance on whether its phones can continue receiving software updates from Android, and discussions between the companies have been about ensuring ZTE can supply parts and service to honor phone warranties.

A ZTE employee told Reuters that staff had been reporting to work as normal but “with not much to do”. The employee, who declined to be named, said business trips had been halted.

Employees at ZTE’s headquarters in the southern Chinese technology hub of Shenzhen were cagey about speaking to reporters after the ban was announced, but some voiced concerns.

One employee said this was the “the biggest challenge” for ZTE since he joined 10 years ago. Another said he hoped the Chinese government would help, saying he was confident President Xi Jinping would “sort out this trouble”.

ZTE settled the sanction case with the U.S. government last March after admitting to illegally shipping products with U.S. technology to countries including Iran and paying a record fine of nearly $900 million.

ZTE Corp25.6
0763.HKHong Kong Stock
--(--%)

• 0763.HK
• 000063.SZ
• ERICb.ST
• NOKIA.HE
• QCOM.O

Last month, the U.S. government reactivated the ban after it said ZTE violated terms of the settlement and made repeated false statements, which ZTE disputed.

Reporting by Sijia Jiang and James Pomfret; Additional reporting by Sheila Dang in New York; Editing by Jason Neely and Marguerita Choy

 

[thilanliyan]

No Axon 9 coming?!! Too bad.
Axon 7 was a really great phone.

 

[realibrad]

It will not be long anymore(maybe 1 or 2 decades) that China will be fully independent technologically and then the US has no control anymore. Also, China has a lot of dollars stored.
Trump is not being smart. If these kind of actions continue, what would happen when China is no longer dependent on the US when it comes to electronic components and starts dumping dollars on the global market as well?


https://ca.reuters.com/article/businessNews/idCAKBN1IA1XF-OCABS

Not sure how this is Trumps fault.

https://www.cnbc.com/2018/04/22/chinas-zte-says-its-seeking-a-solution-to-us-tech-ban.html

ZTE pleaded guilty in March 2017 and agreed to pay a $1.19 billion penalty for having shipped equipment to Iran and North Korea in violation of U.S. regulations. The company promised to discipline employees involved in the scheme, but the U.S. Commerce Department said last week that they were paid bonuses instead.

They got caught breaking the rules, said they would punish people, and then did not.

 

[brandonbull]

It will not be long anymore(maybe 1 or 2 decades) that China will be fully independent technologically and then the US has no control anymore. Also, China has a lot of dollars stored.
Trump is not being smart. If these kind of actions continue, what would happen when China is no longer dependent on the US when it comes to electronic components and starts dumping dollars on the global market as well?


https://ca.reuters.com/article/businessNews/idCAKBN1IA1XF-OCABS

Dimwits want to blame Trump for everything.

 

[thilanliyan]

Yeah, I don't think this is Trump's fault, unless they had expanded sanctions on Iran and NK, which ZTE then violated. I think the sanctions were already in place before Trump though.

 

[William Gaatjes]

Sigh.. simpleminded always miss the bigger picture...
I should have known.
Pointless...

 

[realibrad]

Sigh.. simpleminded always miss the bigger picture...
I should have known.
Pointless...

Then, use your far more complex mind and explain it. How is this Trump's fault?

 

[William Gaatjes]

Then, use your far more complex mind and explain it. How is this Trump's fault?

I will try, but i do not think that the other dumbass will ever understand.

The thing is, they already fined ZTE and ZTE payed the fine.
Why now blocking export to ZTE ?
This will leave a lasting impression of what the US thinks of China and any other country.
This will also again cause only friction in the middle east / west Asia.

I am not going to dig up all dirt that has happened, save to say there is enough to say that the kettle calling the pot black.

I am waiting(but not hoping) for AMD to get sanctioned by the Trump administration because of the deals in China.

 

[realibrad]

I will try, but i do not think that the other dumbass will ever understand.

The thing is, they already fined ZTE and ZTE payed the fine.
Why now blocking export to ZTE ?
This will leave a lasting impression of what the US thinks of China and any other country.
This will also again cause only friction in the middle east / west Asia.

I am not going to dig up all dirt that has happened, save to say there is enough to say that the kettle calling the pot black.

I am waiting(but not hoping) for AMD to get sanctioned by the Trump administration because of the deals in China.

So your position is the following.

1. Sure, ZTE broke the rules, got caught, got fined, and agreed to punish people that broke the rules.
2. They did not punish those people, and actually gave them bonuses.
3. ZTE was punished for breaking rules, so why should they be punished again for doing something else wrong?
4. The US has also broke rules in the past so why should ZTE be punished when they break the rules.
5. Other companies have broken other rules, so why focus on ZTE?

It does indeed seem my mind is not complex like yours, because I still don't see what Trump did wrong here. Hell, I don't really see how Trump is involved here.

 

[William Gaatjes]

So your position is the following.

1. Sure, ZTE broke the rules, got caught, got fined, and agreed to punish people that broke the rules.
2. They did not punish those people, and actually gave them bonuses.
3. ZTE was punished for breaking rules, so why should they be punished again for doing something else wrong?
4. The US has also broke rules in the past so why should ZTE be punished when they break the rules.
5. Other companies have broken other rules, so why focus on ZTE?

It does indeed seem my mind is not complex like yours, because I still don't see what Trump did wrong here. Hell, I don't really see how Trump is involved here.

If you say so. You seem to know it all.

 

[GoodRevrnd]

Beyond the settlement...
https://arstechnica.com/tech-policy...ust-forced-smartphone-maker-zte-to-shut-down/
"In the April 15 order activating the export ban against ZTE, US Commerce Department official Richard Majauskas wrote that ZTE had demonstrated a "pattern of deception, false statements, and repeated violations." A July 2017 letter to US officials was "brimming with false statements," he said."

So if that statement is accurate, this ban has very little to do with Trump. Or, it could be overstating or mis-characterizing behavior after the fine and Trump admin is using all this as a chip / first strike in broader trade insanity. Or maybe another admin wouldn't continue down such a hardline punitive path. I guess we don't know for sure, but this mostly sounds like the escalation of policies and punishments that go back years.

And as to your point, China is rapidly seeking technological independence anyway, so what difference does kicking one of their ill-behaved companies in the nuts make? These areas are also IP minefields, so while it will likely sting markets for western companies in China and developing regions, these same Chines companies will be blocked from doing business in the US, Europe, and developed Asia. I think your fear is somewhat overblown.

 

[William Gaatjes]

Beyond the settlement...
https://arstechnica.com/tech-policy...ust-forced-smartphone-maker-zte-to-shut-down/
"In the April 15 order activating the export ban against ZTE, US Commerce Department official Richard Majauskas wrote that ZTE had demonstrated a "pattern of deception, false statements, and repeated violations." A July 2017 letter to US officials was "brimming with false statements," he said."

So if that statement is accurate, this ban has very little to do with Trump. Or, it could be overstating or mis-characterizing behavior after the fine and Trump admin is using all this as a chip / first strike in broader trade insanity. Or maybe another admin wouldn't continue down such a hardline punitive path. I guess we don't know for sure, but this mostly sounds like the escalation of policies and punishments that go back years.

And as to your point, China is rapidly seeking technological independence anyway, so what difference does kicking one of their ill-behaved companies in the nuts make? These areas are also IP minefields, so while it will likely sting markets for western companies in China and developing regions, these same Chines companies will be blocked from doing business in the US, Europe, and developed Asia. I think your fear is somewhat overblown.

Of course China is seeking independence but i do not think these companies would be banned from Europe or other parts of Asia.
It is not as if there is some Apple clone complete with Apple logo.
Other countries interested in products from China would keep a close watch on the US as well.
Also, if the US would threaten the EU with trade sanctions, the EU would do the same to the US.
It has happened before and usually we as users pay the price because in the end trading is still allowed but with absurd import tariffs.
China provides us with cheap labor. And now that China is becoming more expensive (relatively speaking) because of clean environment mindsets, US and EU companies go to other developing countries.
I have seen it before. It is the same with Russia and the EU. Some companies lose their markets but it is peanuts because everything that really matters still goes on. For example no commodities but gas is still being imported.

 

[William Gaatjes]

But yes, what we do not want is those idiotic trade ideas and solutions.

 

[darkswordsman17]

I liked ZTE's phones (at least the Axon 7 line, and was hoping for some new ones), but they got what they deserved. This has nothing to do with Turmp.

The thing is, if ZTE hadn't basically built their business model on making devices dependent on American developed pieces (Qualcomm chips, and in this instance more importantly, Android), then they wouldn't be out of business. I actually am kinda flabbergasted at how a Chinese company could even be so stupid as to do that though, but then kinda makes you realize how powerful Android is. It really is the new Windows. That is frankly scary (and mindblowing since Apple still makes practically all of the profits in those markets).

Yes China is going to look at how to remedy something similar happening, but so is everyone else. Samsung for instance openly talked about exactly this type of situation (only they talked about Google deciding they didn't want to play nice with Samsung and denying them further Android license; so they started developing their own OS), how in a very short time they could be completely crippled in markets (remember when Apple got injunctions against Samsung?). And Europe has been very wary of Google (and Amazon, and Apple, they still keep an eye on Microsoft too) for years now, which every country on Earth should (including America itself). But at the same time, given the nationalistic tendencies of people like Turmp, its not always bad when there's companies that could basically tell countries to go fuck themselves if they should try to fuck them over, like say if Turmp declared that products made with non-American components were banned or just levied big tariffs on them.

This reminds me of the Hogan-Gawker lawsuit. I am fine with the outcome, but there's a lot of troubling aspects about this, and I'm worried about the ramifications. But, because of the actions of the one party, it was basically inevitable that a situation like this would arise, so its hard to feel much sympathy for them. It sucks for the people working there that weren't part of the aspects that buried the company, but you've got to make them realize there are serious ramifications for acting such.

 

[theeedude]

This is beginning of the end for US tech in China. They will not allow their tech sector to be at the mercy of the US for long. Qualcomm is going to get designed out of future Chinese devices. What would be really interesting is if they forced Intel and AMD to license x86 on FRAND terms to Chinese competitors.

 

[William Gaatjes]

I liked ZTE's phones (at least the Axon 7 line, and was hoping for some new ones), but they got what they deserved. This has nothing to do with Turmp.

The thing is, if ZTE hadn't basically built their business model on making devices dependent on American developed pieces (Qualcomm chips, and in this instance more importantly, Android), then they wouldn't be out of business. I actually am kinda flabbergasted at how a Chinese company could even be so stupid as to do that though, but then kinda makes you realize how powerful Android is. It really is the new Windows. That is frankly scary (and mindblowing since Apple still makes practically all of the profits in those markets).

Yes China is going to look at how to remedy something similar happening, but so is everyone else. Samsung for instance openly talked about exactly this type of situation (only they talked about Google deciding they didn't want to play nice with Samsung and denying them further Android license; so they started developing their own OS), how in a very short time they could be completely crippled in markets (remember when Apple got injunctions against Samsung?). And Europe has been very wary of Google (and Amazon, and Apple, they still keep an eye on Microsoft too) for years now, which every country on Earth should (including America itself). But at the same time, given the nationalistic tendencies of people like Turmp, its not always bad when there's companies that could basically tell countries to go fuck themselves if they should try to fuck them over, like say if Turmp declared that products made with non-American components were banned or just levied big tariffs on them.

This reminds me of the Hogan-Gawker lawsuit. I am fine with the outcome, but there's a lot of troubling aspects about this, and I'm worried about the ramifications. But, because of the actions of the one party, it was basically inevitable that a situation like this would arise, so its hard to feel much sympathy for them. It sucks for the people working there that weren't part of the aspects that buried the company, but you've got to make them realize there are serious ramifications for acting such.

I wonder if there is also a background reason. How much modems and internet equipment did ZTE sell in the USA ?
Is this perhaps also some hidden way of stopping the competition ?

I do know ZTE modems are sold all over the world. They are popular in the Netherlands as well. KPN (internet and telephone services provider) in the netherlands uses them.
I do not know how much ZTE is used in the EU, but this is going to be noticed.

Makes me wonder if this is some hidden deal for Cisco.

 

[alien42]

“President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!”

trump on Twitter, MCGA?

 

[Indus]

https://www.huffingtonpost.com/entr...sanctions-on-iran_us_5af8668ce4b032b10bfbb293

Trump Promises To Help Chinese Company That Violated U.S. Sanctions On Iran

 

[K1052]

The odds that EU nations will abide buy US sanction reinstatement on Iran are surely nosediving at this very moment.

 

[zerocool84]

“President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!”

trump on Twitter, MCGA?

https://www.huffingtonpost.com/entr...sanctions-on-iran_us_5af8668ce4b032b10bfbb293

Trump Promises To Help Chinese Company That Violated U.S. Sanctions On Iran

As usual who knows what the hell is going on with Trump. You literally never know what the hell he's doing. All of a sudden he wants to help China now? What the hell did he think was going to happen to tons of jobs when he put those sanctions in place and started tariffs?

 

[sdifox]

As usual who knows what the hell is going on with Trump. You literally never know what the hell he's doing. All of a sudden he wants to help China now? What the hell did he think was going to happen to tons of jobs when he put those sanctions in place and started tariffs?

Cue cat toast perpetual motin machine video

 

[Linux23]

As usual who knows what the hell is going on with Trump. You literally never know what the hell he's doing. All of a sudden he wants to help China now? What the hell did he think was going to happen to tons of jobs when he put those sanctions in place and started tariffs?

It's like negotiating with jello - Crying Chuck Schumer

 

[GoodRevrnd]

Wat. The only valid analysis of Trump policy: ¯\_(ツ)_/¯

 

[Darwin333]

Chinese telecom equipment maker gives bonuses to people who screwed up and is banned from doing business with the US or US companies.

US banks screw up, committing tons of crimes in the process, causing the entire economy to tank starting the Great Recession requiring a taxpayer-funded bailout in the trillions of dollars, gave over a billion and a half dollars in bonuses to people that screwed up. Not only got to keep doing business in the US but continued getting taxpayer-funded bailouts in secret, allowed to buy up competition for pennies on the dollar, grow even bigger, not go to jail, still have the ability to tank the economy again and probably will eventually because they know the taxpayers will be on the hook, not them. Same assholes get caught red-handed laundering almost a trillion dollars for Mexican cartels and again, get to keep doing business and no one goes to jail.

Yup, sounds about right.

 

[BoomerD]

Makes me wonder wtf Xi has on Trump...or what kind of under-the-table deal was made that "we the people" will never know about. Trump's always been all about lining his own pockets...