US sanctions on ZTE spur China call for self-sufficiency

26 APR 2018

The Chinese government responded strongly to tough US trade sanctions imposed on China-based ZTE, with officials saying the ban highlights the need for the country to reduce its reliance on non-domestic technologies, particularly those from the US.

Senior officials reportedly are holding meetings with industry organisations, regulators and the state-run semiconductor investment fund about accelerating the country’s already aggressive plans to become self-sufficient in core technologies, such as chips.

The country’s Ministry of Commerce said: “If the US attempts to curb China’s development…it miscalculates. The action targets China, however, it will ultimately undermine the US itself, affecting tens of thousands of jobs and hundreds of related US enterprises,” South China Morning Post reported.

China Daily quoted Miao Qiguang, a professor at the School of Computer Science and Technology at Xidian University, as saying: “The ZTE incident is a wake up call for China to shed reliance on foreign technologies and give careful attention to currently stalled efforts to improve domestic chip design.”

ZTE moves
Meanwhile, ZTE said it plans to take “certain actions” under US law following the export sanctions, which it noted could be related to the ongoing US-China trade dispute, Reuters reported.

A ZTE representative said in a call to major suppliers it would be naive to think the ban was ordered in “a vacuum” and was assumed to be connected to the trade war, a source told Reuters.

The company did not state the specific actions it plans to take and didn’t respond to questions sent by Mobile World Live. However, the vendor last week vowed to fight the trade ban imposed by the US Department of Commerce, stating “judicial measures” were an option.

ZTE faces broad repurcussions from the US move, but the most significant impact could be felt by the vendor’s handset business by blocking access to key hardware from companies including Qualcomm and, potentially, also the use of Android software from Google.

Trading in its shares have been suspended since 17 April when the company requested a halt in transactions on the Stock Exchange of Hong Kong.

Author

Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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