ZTE Chinese group logo photographed on a Shanghai building on May 3, 2018
While the survival of Chinese telecom giant ZTE is threatened by a US sanction, Donald Trump seemed Sunday to show signs of openness in saying work to an end with Beijing, against a background of strong Sino-US trade tensions.
“Chinese President Xi and I are working together to give ZTE (…) a way to get back to work quickly.” Too many jobs lost in China The (US) Department of Commerce has been ordered to to reach! “, tweeted the American president.
On Wednesday, the Chinese giant – which achieved in 2017 a turnover of 108 billion yuan ($ 16.7 billion) – announced that “the main activities of the group (had) ceased” as a result of the American decision, which endangers its very survival. He had specified to communicate with the American administration to modify or cancel the sanction.
Washington accuses it of violating its commitments on trade embargoes and decided in mid-April to ban, for seven years, the export of US electronic components for ZTE, such as microprocessors essential to its smartphones.
Beijing had issued “solemn protests” on this issue, which it has erected as a priority in the ongoing trade negotiations between the two countries.
The case thus further aggravates the trade disputes between Washington and Beijing, as the specter of a trade war looms, with punitive US tariffs that could be put in place on May 22.
Spearheading the development of 5G (ultra-fast mobile internet) infrastructure in China, ZTE, which has more than 74,000 employees, is highly dependent on electronic components purchased in the United States for its fiber-optic telecom networks.
In addition to microprocessors, produced by American firms such as Intel or Qualcomm, ZTE also uses the Android mobile operating system (Google).
By showing that he can land the colossal ZTE, Washington has made a show of force, which could be useful in its trade negotiations with Beijing.
Donald Trump also a few hours later tweeted again on the subject.
“China and the United States work well together on trade, but past negotiations have been so favorable to China for many years that it is difficult for them to reach an agreement that is beneficial to both countries. + cool +, it will do it! “, he wrote.
– Espionage charges –
ZTE is also emblematic of the battle waged by the two world powers in the technology sector. A war that is both commercial and geopolitical, Washington suspecting Beijing of wanting to dominate the 5G market for espionage purposes, with companies like ZTE or the other telecoms giant Huawei as armed arms.
The United States denounces in particular the massive subsidies of the Chinese State to the strategic sectors and the transfers of intellectual property imposed on the foreign firms.
For its part, China, which imports, for example, 80% of its microprocessors, wants to reduce its dependence by developing its own electronic components.
US authorities have already banned the military and civilian officials from using ZTE and Huawei smartphones, which are also very active in 5G.
“Our intelligence agencies have warned that technology and ZTE phones pose a big threat to cyber security,” Adam Schiff, a Democratic representative and member of the House Intelligence Committee, told reporters on Sunday. representatives.
“You should be more concerned about our national security than Chinese jobs,” he added to Mr. Trump’s attention.
In March, the United States blocked the acquisition of the US microprocessor manufacturer Qualcomm by a competitor then based in Singapore, for reasons of “national security” on the grounds that it could have, in turn, help Huawei in the 5G.
For technology experts, as the industry is led by China and the United States, whose companies are dependent on each other, a conflict is potentially very damaging for everyone.
“It’s going to disrupt supply chains, it’s going to affect a lot of companies in a variety of ways,” said a senior technology executive who wished to remain anonymous.