Finance

ZTE paid United States tech firms US$2.3bn for parts, report

ZTE paid United States tech firms US$2.3bn for parts, report

President Donald Trump says he now wants to help save the beleaguered handset maker, tweeting Sunday that he wanted to give the company "a way to get back into business, fast".

The comment marks a dramatic shift in tone for a president who has long accused China of stealing U.S.jobs - and could presage a reversal of one of the Trump administration's toughest actions to date against a Chinese company.

"Too many jobs in China lost", Trump tweeted.

The company has been banned from selling equipment in the US, but shutting out supply chain partners like Intel, Qualcomm and Google is potentially catastrophic.

In a remarkable development, President Trump has thrown an olive branch to controversial Chinese telecom firm ZTE less than a week after it ceased its main business following restrictions from the USA government. The company said it is working to have the ban modified or reversed.

USA companies provide at least a quarter of the components used in ZTE's equipment, which includes smart phones and telecommunications network equipment. In a statement Wednesday, ZTE said "the major operating activities of the company have ceased".




In March a year ago ZTE paid almost $900 million in penalties for exporting United States technology to Iran and North Korea in violation of sanctions.

Chinese telecom giant ZTE said its major operations had "ceased" following last month's USA ban on American sales of critical technology to the company, raising the possibility of its collapse. "Commerce Department has been instructed to get it done", Donald Trump wrote on Twitter.

At the time, the company said it was still assessing the impact of being placed on the Commerce Department's blacklist. The US move against ZTE is also a blow to American component makers like Qualcomm, Microsoft and Intel, who sell it billions of dollars worth of equipment every year.

Beijing has closely followed the developments around ZTE, a company with 80,000 employees headquartered in southern China. Last week, Telstra said it would stop sales of ZTE smartphones, though it indicated it was "hopeful that ZTE will be able to reach a resolution to this matter soon so that we can recommence selling Telstra-branded ZTE devices".

Earlier this year, the USA government banned American firms from sales to ZTE for seven years.