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China's ZTE back in business?

May 25, 2018

Media reports say the US administration has reached a deal with Chinese telecom company ZTE. The agreement would save the firm from going out of business after being hit by far-reaching US sanctions.

https://p.dw.com/p/2yLVo
ZTE logo
Image: picture-alliance/dpa/AP/Ng Han Guan

The New York Times reported Friday the Trump administration had struck a deal ensuring the survival of Chinese telecom firm ZTE. If true, such an agreement would mean that trade negotiations between the US and China could move forward.

The newspaper said the deal brokered by the Commerce Department involved ZTE paying a heavy fine for violating US sanctions against Iran and North Korea, hiring American compliance officers to be placed at the company and making changes to its current management team.

In return, the Commerce Department would lift a so-called denial order that's currently preventing ZTE from buying American products.

Supporting US jobs

This would put ZTE in a position to once again start doing business with US companies on which it depends to a large extent. Among other things, the Chinese firm had close business relations with San-Diego-based chipmaker Qualcomm, a key ZTE supplier.

The Chinese telecom giant had faced the prospect of shutting down following the harsh US penalties that ruined its supply chains.

The New York Times said US President Donald Trump had indicated he was interested in reaching a deal with ZTE, remarking "that its purchases of American products also supported American jobs."

ZTE: Trump's bargaining chip

hg/jd (Reuters, dpa)