U.S. firms 'more affected'
China's second-largest telecom equipment maker ZTE Corp is now operating normally and is evaluating the impact on the company posed by a U.S. Commerce Department decision, the company said in a statement sent to the Global Times on -Sunday.
ZTE said it has noted some media reports saying that the company faces U.S. export restrictions.
Reuters reported Saturday that the U.S. Commerce Department is set to place export restrictions on ZTE for allegedly selling embargoed U.S. technology products to Iran.
ZTE closely complies with international industry rules as well as the laws of foreign countries, the statement said.
Experts said that the restrictions will have more effect on U.S. product makers than on ZTE.
U.S. suppliers are required under that country's restrictions to apply for an export license before shipping any U.S.-made equipment or parts to ZTE, which will make it hard for the Chinese company to purchase U.S. products, according to the Reuters report.
The license applications will generally be denied, said a notice that will be released by the U.S. Commerce Department sometime this week, the report noted.
The restrictions will take effect on Tuesday, Reuters noted, and they will apply to any company across the world that wants to ship U.S.-made products to ZTE.
ZTE can appeal the action, according to Reuters.
The restriction will have a limited impact on the domestic telecommunications titan as its U.S. suppliers are limited, Zhang Yi, CEO of iiMedia Research Institute, a mobile Internet consulting agency, told the Global Times on Sunday.
It seems that U.S. product makers will be affected more than the Chinese company, Zhang noted. "Given the current economic situation in the U.S., the country is eager to sell its products and technology to the world and ZTE is one of its big clients that will provide good profits to these U.S. firms," he said.
Fu Liang, a Beijing-based IT expert, agreed with Zhang's view, saying that the Chinese company is interdependent with the U.S. product makers, not only in terms of parts and products, but also technology.
"As ZTE sells its telecom equipment and terminal machines to the U.S. market, the business, to some extent, will also be affected due to the Commerce Department's decision," Fu told the Global Times on Sunday.
The U.S. Commerce Department launched investigations into ZTE's alleged violation of U.S. export controls on Iran following media reports in 2012 that "the company had signed contracts to ship millions of dollars worth of hardware and software from some of America's best-known tech firms to Iran's largest telecom carrier, Telecommunication Co of Iran (TCI)," Reuters said.
The U.S. product producers, including Microsoft Corp, IBM, Oracle Corp and Dell Inc, have all said they were not aware of ZTE's contract with TCI, Reuters said. It is not clear if any of these companies still do business with ZTE, said the report.
ZTE will no longer seek new customers in Iran and limit business activities with existing customers, according to a statement released in March 2012 on the company's website, right after media reports said the company shipped U.S.-made technology products to Iran despite U.S. sanctions on the country.
Subsequently, ZTE Chairman Hou Weigui said that the company had halted business in Iran, although it had to continue to provide services for products previously sold to customers in the country, the Xinhua News Agency reported in April 2013.
Founded in 1985, ZTE Corp operates in 160 countries and regions in the world, the company's website showed.v
