Trump pledges to help Chinese phone maker that was hurt by sanctions


In a statement Wednesday, ZTE said "the major operating activities of the company have ceased". The person reiterated ZTE's recent point about its cash reserves which allow it to stay afloat over the troubled period, though it's still unclear how large those holdings actually are, i.e. how much time could they buy.

Ordering a denial may have been the Commerce Department's idea of playing hardball to force compliance.

The Commerce Department in April cut off the massive Chinese telecom equipment maker from its USA suppliers after determining that the company flouted a 2017 agreement resolving allegations it illegally shipped telecommunications equipment to Iran and North Korea.

The extent of the impact of the Commerce Department ban on United States suppliers was noted by the ZTE official, who was not authorised to speak publicly, as Chinese and U.S. government officials discuss a Washington visit next week by China's top economic official.

The U.S. government initially penalized ZTE in 2017, requiring the Chinese telecom giant to pay $1.19 billion to settle charges that it violated U.S. sanctions in selling equipment to Iran and North Korea.

The U.S. ban prevents ZTE from purchasing American hardware and software for the next seven years, which is a period that effectively no tech company in the world would be able to survive unscathed.

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Mr Trump tweeted that he was working with President Xi to ensure ZTE would get back into business fast, saying too many jobs in China were at risk. The order was causing "irreparable harm" to the company and partners, as well as millions of consumers, including those who own its phones and major network operators, the person said.

ZTE's fiber-optic networks depend on U.S. components and its cheap smartphones sold en masse overseas are powered by United States chips and the Android operating system.

Last week, the company said that its earnings have surged, reporting a 39 percent jump in net income for the first quarter.

None of the other companies could immediately be reached for comment. The company's R&D expenditure previous year stood at 12.96 billion yuan, which accounted for about 11.9 percent of the company's operating revenue.

During a meeting with seven high-level members of the Trump administration last week in Beijing, Chinese officials reportedly brought up the ZTE crackdown and urged the USA to ease up.