China is outraged as the U.S. government plans to punish its largest telecom equipment maker ZTE Corps for alleged violations of sanctions on Iran.
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U.S. Treasury Secretary Jacob Lew raised the issue last month during his meetings with Chinese officials, the person said.
The proposed restrictions would cause serious problems for ZTE, one analysts told Reuters, saying the Chinese company counts Qualcomm, Microsoft, and IBM as among its major suppliers. “It’s very significant to many companies both in the US and outside the USA”, said Doug Jacobson, an export attorney at law firm Jacobson Burton Kelley. “ZTE has been cooperating and will continue to cooperate and communicate with all USA agencies as required”, the Shenzhen-based company said. ZTE’s technology purchases support thousands of U.S.jobs that might be in jeopardy, the Commerce Ministry said.
But Chinese Foreign Minister Wang Yi was more critical of the decision, blasting the United States for imposing the restrictions on ZTE for allegedly shipping products to Iran in violation of Washington’s longstanding trade sanctions on the country. ZTE sells handset devices to telecom network operators such as AT&T, T-Mobile US and Sprint in the U.S.
According to one company, ZTE already has procured the parts for the U.S.it needs during 2016. In those documents, ZTE referred to import and export control “risk avoidance”.
The Commerce Department’s decision could further fuel escalating tensions between China and the USA over cybersecurity and technology trade.
In response, the U.S.is imposing restrictions that will make it harder for ZTE to acquire US components. IT companies in China: They have faced significant government mistrust in the aftermath of Edward Snowden’s revelations about a massive USA cyber-espionage program, and there was also anger here after the US government accused China of commercial cyber-espionage.
Some experts said that suppliers using American-made parts would possibly stop its transactions with ZTE, Yahoo reported.
The department released documents it said showed ZTE knowingly violated controls on sales of USA high-tech goods to Iran and set up front companies to hide that.
Trade war between China and the United States has intensified in recent years.
But sanctions tied to accusations that Tehran supports terrorism remain in effect, still largely blocking U.S. companies from business with Iran.
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An ethics council that advises the bank said ZTE was facing corruption allegations in 18 countries and the group was or had been under investigation in 10 of them.
