Tue, May 15, 2018 - Page 10 News List

Trump vows to save penalized ZTE

CHINA FIRST?ZTE was punished for illegally selling goods to North Korea and Iran, but Trump said he would get the firm back in business, as too many jobs were lost in China


US President Donald Trump on Sunday said he was working with Chinese President Xi Jinping (習近平) to prevent telecom ZTE Corp (中興通訊) from going out of business after it was hit by a US technology sales ban.

Trump tweeted that he had issued instructions for officials to come up with a rescue plan, saying too many jobs were at risk.

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

The concern for Chinese workers comes despite Trump’s slogan to “Make America Great Again” and his repeated vows to bring back US jobs, which he complains have been lost to other countries, particularly China.

ZTE, which employs 80,000 people, last week said that its major operations had “ceased” after being banned for seven years from buying critical US technology, raising the possibility of its collapse.

Its fiber-optic networks depend on US components and its cheap smartphones sold en masse abroad are powered by US chips and the Android operating system.

US officials imposed the ban because of what they said were false statements by the firm over action it claimed to have taken regarding the illegal sale of goods to Iran and North Korea.

ZTE pleaded guilty to the charges in March last year and was hit with US$1.2 billion in fines.

Trump has insisted that relations between Washington and Beijing have never been better and he has been working closely with Xi in efforts to persuade North Korea to abandon its nuclear program.

At the same time, threats of mutual tariffs have sparked fears of a trade war, after Trump accused China of unfair practices that have cost US jobs.

The Washington Post late on Sunday reported that the White House and senior Chinese officials are discussing a deal that would relax the severe penalties on ZTE, in exchange for unspecified demands from Trump.

Citing people briefed on the discussions, the Post said ZTE has become a bargaining chip as Washington seeks trade-related concessions while pushing for cooperation on sanctions against North Korea and Iran.

Beijing’s top economic official, Chinese Vice Premier Liu He (劉鶴), is due in Washington this week for trade talks.

However, the Post reported that a high-level Chinese delegation was in Washington on Friday last week and raised the issue of whether Washington could relax its stance on ZTE.

The newspaper also cited a veteran lobbyist as saying the high-powered Hogan Lovells LLP law firm, which has represented ZTE, has been asking people close to the Trump administration for ways to alter the US position.

Cheng Xiaohe (成曉河), an international relations professor at China’s Renmin University, last week said that Washington had sent Beijing a clear signal “through its attack on ZTE: compromise, make compromises” on trade. “Otherwise, we will kill you.”

There has been an intense rivalry for supremacy in emerging technology fields such as artificial intelligence and 5G.

Against that background, the Pentagon cited security risks in banning personnel on US military bases from buying equipment from ZTE and fellow Chinese maker Huawei Technologies Co (華為).

The US president earlier this year cited security concerns when he took the unusual step of blocking the proposed takeover, by a firm then-based in Singapore, of US chipmaker Qualcomm Inc.

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