ZTE shuts down majority of operations following U.S. government import block

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The US trade war on China has claimed its first scalp, with telecoms giant ZTE announcing it had halted major business activities after the US government banned sales of the its equipment.

Trading will remain suspended pending the further release of an inside information announcement regarding, among other things, an assessment on the major impact of the denial order on the business and operations of the company, ZTE recently said in a statement.

In response, the U.S. Department of Commerce issued a ban on U.S. companies selling components to ZTE. Analysts have said it will be hard for ZTE to stay competitive even if it could find non-American suppliers.

The company added that it's communicating with the USA government to have the denial order reversed or modified.

Last week, Chinese officials holding trade talks with U.S negotiators in Beijing asked the United States to hear ZTE's appeal and take into account the company's efforts to improve its compliance process.

The Commerce Department has imposed a seven-year sales ban on ZTE in a case involving exports of telecom gear to Iran and North Korea. The Chinese government raised the issue of ZTE last week with a visiting US Trade Delegation. ZTE was slapped with a seven-year ban prohibiting it from any transactions with the U.S. for breaching the terms of a settlement related to its business dealings with Iran. The decision came after it was revealed the company allegedly made false statements to USA officials.

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USA authorities imposed the penalty after discovering that Shenzhen-based ZTE had misled regulators involving the illegal shipments to North Korea and Iran.

From what we can tell in the crowd support link above that current users of Telstra/ZTE devices can continue to use these devices and that safety has not been compromised nor will it be.

"We are hopeful that ZTE will be able to reach a resolution to this matter soon so that we can recommence selling Telstra-branded ZTE devices", the Telstra executive wrote.

According to reports, workers at the company's headquarters in Shenzhen are reporting to work but "with not much to do".

Will these companies, supported by China's super-state, ramp up R&D to reduce their reliance on technology from an increasingly temperamental source?

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