Huawei and ZTE Hit Hard as US Moves Against Chinese Tech Firms US ban on sales to China's ZTE opens fresh front as tensions escalate ZTE replaced chief compliance officer after company admitted to lying to US government China's ZTE delays earnings amid confusion over US ban Apple's Chinese sales at risk after FCC forwards security ban targeting Huawei, ZTE

Huawei and ZTE Hit Hard as US Moves Against Chinese Tech Firms

The U.S. and China are threatening a global trade war as they look to protect their most advanced industries.

Huawei and ZTE Hit Hard as U.S. That was about 20 percent of its total sales. A Senate committee wrote to Huawei’s founder to ask what the company knew about the vulnerabilities, and how it had been affected by them. Follow Raymond Zhong, Paul Mozur and Jack Nicas on Twitter: @zhonggg , @paulmozur and @jacknicas . The Chinese company paid $890 million in fines and penalties after it pleaded guilty last year to conspiring to violate U.S. sanctions by illegally shipping U.S. goods to Iran.

The action followed ZTE’s violation of an agreement reached after it was caught illegally shipping U.S. goods to Iran. At least one U.S. technology company said the ban would not affect its business with ZTE. Last month, U.S.-China relations began to splinter when President Trump leveled tariffs on up to $60 billion in imports , a move that came on the heels of aluminum and steel tariffs. ZTE has similarly cut its lobbying expenditures, from $860,000 in 2016 to $510,000 last year, according to ZTE filings.

Like other major tech companies, whether American or Chinese, Huawei has been caught in the crossfire as the Trump administration ratchets up efforts to stop China's high-tech ambitions. It is not clear whether he will be replaced. This was the sanction imposed by the US government after finding ZTE in violation of an earlier import ban against Iran and North Korea. That’s especially true when it comes to network technology, where it shares the stage with the likes of China, Korea, and Japan.

US ban on sales to China's ZTE opens fresh front as tensions escalate

The United States has banned American firms from selling parts and software to China's ZTE Corp for seven years, potentially devastating for the telecoms equipment maker and exacerbating tensions between the world's two largest economies.

A version of this article appears in print on April 18, 2018, on Page A1 of the New York edition with the headline: U.S. But the Chinese company admitted in March that while it had fired the four senior employees, it had not disciplined or reduced bonuses to the 35 others. REUTERS/Sergio Perez ZTE has sold handset devices to U.S. mobile carriers AT&T Inc, T-Mobile US Inc and Sprint Corp. ZTE said its board postponed a meeting to approve the results while it reviews the order.

For its part, Apple is looking to mitigate potential threats to its bottom line by becoming a more active participant in Chinese business development circles. Reporting by Paresh Dave and David Shepardson; Additional writing by Diane Bartz and Chris Sanders; editing by Susan Thomas and Rosalba O'Brien Our Standards: The Thomson Reuters Trust Principles. China's Huawei, for example, has been blocked from striking a deal to sell its new smartphone via a US carrier over security concerns.

The company's policy operations in the United States are led by a relatively recent arrival, Zhang Ruijun, who took the post nine months ago after working for the company in Mexico and Russia. The ban will affect the company’s ability to compete in both networking equipment and mobile device markets. At the moment, it would seem that Qualcomm has the upper hand when it comes to 5G but it is also working with other tech companies in its development.

The decision takes direct aim at Huawei, which makes telecommunications network equipment and smartphones, and its main Chinese rival, ZTE, sending a message that the government doesn’t trust them. The Chinese government also could walk back recent commitments to allow more financial and electronic payments services from Mastercard, Visa and JPMorgan Chase. Then, last week, Huawei laid off five American employees, including William B.

ZTE replaced chief compliance officer after company admitted to lying to US government

ZTE Corp, facing a seven-year ban on buying crucial American technology, replaced its chief compliance officer after admitting to making false statements to the US government over its adherence to a settlement agreement. ...

Trading in its shares has been suspended in China since Tuesday. The company has spent billions of dollars licensing technology from U.S. partners, he said. Most recently, CEO Tim Cook last month acted as co-chair of the China Development Forum, an annual government-sponsored conference covering a range of hot-button issues. Apps Newsletters Reuters Plus Advertising Guidelines Cookies Terms of Use Privacy All quotes delayed a minimum of 15 minutes.

One recent example of reduced communication with Washington came after the discovery in January of security flaws in the microprocessors inside nearly all of the world's computers. When it comes to the next generation of mobile internet, or 5G, Huawei has invested heavily in technology development. And not just in the US but globally as well. The seven-year ZTE sanction, however, will force other companies and countries, specifically China, to reconsider their plans for building 5G networks without Qualcomm in the picture.

The moves intensify an already testy fight between China and the United States for high-tech supremacy. For ZTE, this week’s sanctions are a nightmare come true. Plummer, the executive who was the face of its Sisyphean efforts to win over Washington. We’re interested in your feedback on this page. Picture taken September 27, 2017. Apps Newsletters Reuters Plus Advertising Guidelines Cookies Terms of Use Privacy All quotes delayed a minimum of 15 minutes.

China's ZTE delays earnings amid confusion over US ban

China's ZTE Corp on Wednesday postponed the release of quarterly earnings, saying it needs time to assess the impact of a U.S. order that bans American companies from selling it parts, which could undermine its ability to manufacture equipment.

See here for a complete list of exchanges and delays. © 2018 Reuters. At the crux of this is a suspicion that Chinese companies are the eyes and ears of the Chinese government in Western markets. A Senate committee wrote to Huawei's founder to ask what the company knew about the vulnerabilities, and how it had been affected by them. Chinese carriers are likely to deploy such networks more quickly than their American counterparts are, at least in the beginning.

It will be difficult not to see this political move independent of the US’s trade war with China. Apps Newsletters Reuters Plus Advertising Guidelines Cookies Terms of Use Privacy All quotes delayed a minimum of 15 minutes. The company made a big push in the United States with a new line of smartphones this year. The company’s smartphones and network gear rely on American microchips and software, which means it could need to redesign as much as 90 percent of its product line.

Huawei, Chinese Technology Giant, Is Focus of Widening U.S. REUTERS/Stringer But Jefferies also said it expected ZTE would be able to settle with U.S. authorities in three to five months. See here for a complete list of exchanges and delays. © 2018 Reuters. ZTE has not responded to requests to describe how it intends to respond to the ban, which a senior U.S. See here for a complete list of exchanges and delays. © 2018 Reuters.

Apple's Chinese sales at risk after FCC forwards security ban targeting Huawei, ZTE

Apple could soon find itself caught in the middle of a quickly escalating trade skirmish between the U.S. and China. The U.S. Federal Communications Commission on Tuesday moved forward with plans to limit sales of certain Chinese telecommunications products, a move that leaves America's high-tech industry open to tit-for-tat retaliations.

But as 5G comes up in the United States, Japan, South Korea and Europe, Nokia and Ericsson will catch up, said Pierre Ferragu, an analyst in New York with New Street Research. It’s almost ironic that American chipmaker Qualcomm would actually be negatively affected by this sanction. ZTE, after all, is one of the region’s biggest network hardware companies, even if its smartphone business is dwarfed by others.

But that effort was derailed when AT&T, appearing to bow to government security concerns, walked away from a deal to sell the devices. No conclusion has been reached yet, the person said. Interested in All Things Tech? Accessibility concerns? Under terms of the ban, U.S. companies cannot export prohibited goods, such as chip sets, directly to ZTE or via another country, beginning immediately. Cheng was also removed from his role overseeing intellectual property at China’s biggest listed telecommunications equipment maker.

Apple could soon find itself caught in the middle of a quickly escalating trade skirmish between the U.S. and China. REUTERS/Carlo Allegri/Illustration The U.S. At the time, the US said if ZTE refused to comply, there would be consequences. While that may have been true in the past, it's certainly not fair to say that today. At Tuesday's meeting with analysts, executives at the company, which says it is owned by its employees and not by the Chinese state, emphasized growth opportunities in Europe and Asia.

ZTE believes Android ban could threaten future of the company

Since then, Huawei has signaled that its political battles in Washington may be all but lost. A line outside an Apple store in Beijing. Invalid email address. Email us at [email protected] . As U.S. concerns about safeguarding its chip technology and cutting its trade deficit grow, the tech sector has become a flashpoint in the broader battle about trade and economic policy, with U.S. It is unclear whether Cheng remains an employee at ZTE.

The U.S. Commerce Department banned American firms on Monday from selling parts and software to ZTE ( 000063.SZ ) for seven years. This week, the US made good on those threats and is hitting ZTE where it hurts. Recently, Chinese firms have also beaten global firms in China, as ride-hailing giant Didi Chuxing proved recently by driving Uber out . For Huawei, the major challenge is not how we can serve operators better," said David Wang, a company president.

Again, we leave the legality of such moves up for debate, but that possibility gives Qualcomm’s rivals the opening they need. A ZTE smart phone is pictured in this illustration taken April 17, 2018. The company has been dialing back on government outreach in the United States, including lobbying, and last week it cut key staff there, according to people familiar with the matter. Huawei is a global telecommunications equipment powerhouse, with $93 billion in revenue last year.

China's ZTE may lose Android license as US market woes build

Chinese smartphone maker ZTE Corp's U.S. woes deepened on Tuesday, as regulators proposed new rules that could cut into its sales, while a supply ban means it may not be able to use Android software in its devices, according to a source.

President Donald Trump accusing Chinese firms of intellectual property theft for years. A staff member manning the company’s general line said there were several employees named Cheng Gang, though none of them are from the legal or compliance departments. Washington has not included any “off ramp” under the terms of this week’s order, the official said. Chinese firms Huawei and ZTE are widely thought to be targets of the regulations, which are pending until the FCC finalizes the motion with a second vote.

A shortage of US components is likely to cause ZTE to miss shipment deadlines and lose orders, according to investment firm Jefferies. Chinese tech firms do get help from their government, in the form of protection of the domestic market, which has allowed them to grow and dominate in China. The company spent $1.2 million on lobbying that year. In the United States, Huawei customers that would be affected by the FCC's proposed rule -- small carriers in rural areas -- may soon need to find new equipment suppliers.

REUTERS/Carlo Allegri/Illustration The U.S. The new F.C.C. rule, which would become final with a second vote, could kill off what little equipment business Huawei has in the United States. Huawei’s troubles in the United States have been mounting since 2012, when a congressional report warned that its gear could be used to spy on Americans or to destabilize American telecom networks. Plummer, who was Huawei’s vice president of external affairs, had been with the company for almost eight years.

Should the West suspect Chinese tech?

The US says national security concerns justify sanctions on Chinese tech firm ZTE.

The moves threaten to further complicate relations between the United States and China. ZTE's chairman Yin Yimin has reportedly said this is a "crisis" and called for his 80,000 strong staff to remain calm, according to a leaked memo seen by the South China Morning Post . That's not to say they're not formidable players in their own right, though. Last year, it spent $60,000 on such efforts. The association's members have even elected a Huawei executive, William Levy, to their board.

Department of Commerce on Monday banned sales of components to ZTE for seven years after China’s No. A factory at ZTE headquarters in Shenzhen, China, where Huawei is also based. The company spent $1.2 million on lobbying that year. He was the most senior member of Huawei’s American policy team who was not a Chinese citizen. China responded swiftly, warning it is prepared to take action to protect the interests of Chinese firms and saying it hopes the United States can deal with the issue in accordance with the law.

The replacement is among the steps that ZTE have taken in the wake of the ban by the US government. ANDROID UPDATES One key area of concern is whether ZTE will be able to continue to sell phones running Google’s widely used Android operating system. Pai's commentary comes a day after the Department of Commerce instituted a seven-year ban barring ZTE access to critical U.S. components. The Commerce Department decision means ZTE Corp may not be able to use Google’s Android operating system in its mobile devices, a source familiar with the matter said on Tuesday.

Unable to crack into US market, Chinese giant Huawei scales back on political outreach here

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The Dallas Morning News Inc. It’s amusing to see reports saying ZTE will lose its license to use Android, which isn’t entirely correct. Iranian sanctions, sending investors scrambling to determine which U.S. companies were losing business. These are uncertain times for tech companies, whether American or Chinese, that are trying to do business across the Pacific. Last year, it spent $60,000.

The company has set up a crisis management group in response to the ban, said a ZTE source, declining to be identified as the information was confidential. Qualcomm was not immediately available to comment. You are signed up. ZTE and Google have been discussing the impact of the ban, a source familiar with those discussions told Reuters on Tuesday. With two leading Chinese exporters in the FCC's crosshairs, industry watchers believe China is preparing to level sanctions of its own.

Granted, these are two different issues, but the incidents highlight one glaring fact: the West is increasingly suspicious of Chinese tech. Don't miss a story. The Commerce and Treasury departments have subpoenaed it over possible violations of U.S. sanctions on Iran and North Korea. The commission unanimously adopted a proposal to take public comment on banning allocations from the $8.5 billion Universal Service Fund from going to those companies.

FCC Initiates Process to Restrict USF Funding for National Security Risks

Major American carriers such as Verizon and AT&T have since shunned Huawei. The company’s policy operations in the United States are led by a relatively recent arrival, Zhang Ruijun, who took the post nine months ago after working for the company in Mexico and Russia. ZTE is China’s No. Shares in optical networking equipment maker Acacia Communications Inc, which gained just under a third of its total 2017 revenue from ZTE, tumbled 35 percent.

ZTE shipped 46.4 million smartphones last year, placing it seventh among Android-based manufacturers, according to research firm IHS Markit. Last year, the region generated $44.8 billon for Apple over fiscal 2017 , accounting for some 20 percent of total net sales. Google declined to comment and ZTE has not responded to requests to comment. The geopolitical tension Mr DeAngelis is referring to is the ongoing trade row between the US and China.

The company has said repeatedly that its products pose no security risk and that it complies with the law everywhere it operates. Huawei is probably thanking its lucky stars that it got off easy. That won’t mean the Android platform won’t be affected. Telecom equipment maker FiberHome Telecommunication Technologies Inc ( 600498.SS ) also could gain from ZTE’s loss, analyst Jun Zhang from Rosenblatt Securities said.

ZTE sanction: a slippery slope for the global mobile market

Huawei is probably thanking its lucky stars that it got off easy. The US government might be working to block sales and use of its products in the country, but it remains unhindered in making such products and selling them elsewhere, even indirectly in the US. Unfortunately for ZTE, it might be facing the worst

Copyright © 2018 South China Morning Post Publishers Ltd. Google declined comment and ZTE did not respond to requests to comment. Similar concerns were aired by privacy advocates when Apple announced plans to migrate Chinese iCloud customer data, and accompanying cryptographic keys, to local servers. Pai did not specify China or specific companies. China says that's not true, and Beijing has been very vocal about the way it perceives its firms are being treated by the West.

Still, the layoffs last week appear to be an acknowledgment by Huawei that it has failed to clear the political cloud around it. The US government might be working to block sales and use of its products in the country, but it remains unhindered in making such products and selling them elsewhere, even indirectly in the US. Again, ZTE is a small player but its sanction weakens Google’s attempts to unify the already fragmented Android landscape.

The latest moves against Huawei and ZTE mean that American companies like Apple and Qualcomm could soon be caught in the crossfire — and they have a lot to lose. And bills are before Congress to stop government agencies and contractors from buying Huawei products. These carriers love Huawei gear, said Carri Bennet, general counsel for the Rural Wireless Association, an industry group for American telecom companies with fewer than 100,000 subscribers.

Other optical component companies also slid, with Lumentum Holdings Inc falling 8.9 percent and Finisar Corp dropping 4 percent. FILE PHOTO - Visitors pass in front of the Chinese telecoms equipment group ZTE Corp booth at the Mobile World Congress in Barcelona, Spain, February 26, 2018. Officials at two U.S. wireless carriers said on Wednesday that they were still assessing how the ban would affect their customers.

US suppliers to ZTE may find more demand from China firm's rivals

Other customers may make up sales that U.S. suppliers to ZTE Corp (000063.SZ) lose due to a U.S. government ban on doing business with the Chinese phone and network equipment maker, industry insiders and analysts said on Tuesday, as some of the worst-hit stocks recovered ground.

China's Ministry of Commerce has urged the United States to "create fair, just, and stable legal and policy environment for Chinese companies", with regards to the ZTE decision . Huawei's tactics are changing as its business prospects in the United States have darkened considerably. Plummer, Huawei's vice president of external affairs, had been with the company for almost eight years. Unfortunately for ZTE, it might be facing the worst challenge to its smartphone business yet.

But ZTE could face a potentially inescapable problem for its handsets if it cannot use the Android software from Alphabet Inc’s ( GOOGL.O ) Google. Apple, for example, sold $46.5 billion worth of iPhones and other products in mainland China, Taiwan and Hong Kong last year. In January, researchers discovered security flaws in the microprocessors inside nearly all of the world’s computers. The association’s members have even elected a Huawei executive, William Levy, to their board.

Oclaro Inc, which got 18 percent of its fiscal 2017 revenue from ZTE, lost 14 percent. REUTERS/Sergio Perez/File Photo ZTE ( 000063.SZ ), a maker of telecommunications equipment and smartphones, was due to release results on Thursday. They declined comment on how they would respond if ZTE is unable to provide Android software updates for phones already used by their customers. Predictions stemming from the FCC action add to an increasingly complex trade climate that could turn volatile.

And perhaps more notably, it also said it was prepared to take action to protect the interests of Chinese firms. On Tuesday, the Federal Communications Commission voted to proceed with a new rule that could effectively kill off what little business the company has in the United States. He was the most senior member of Huawei's American policy team who was not a Chinese citizen. ZTE is barred from purchasing American technology, both hardware and software, for seven years.