Chinese equipment and handset vendor ZTE has secured a US$10 billion credit line from China Exim Bank, its second such deal with a Chinese bank this year. In a statement, ZTE said it has entered into “a strategic bank-enterprise cooperation relationship” that will see China Exim Bank support ZTE’s international expansion plans. It added that the loan will be used for overseas project financing, consulting services, financial services (other than financing) and innovative ventures. The agreement will last for three years. ZTE agreed a similar deal with the China Development Bank (CDB) in March, which saw it secure a separate US$15 billion credit line.
Both deals are aimed at strengthening ZTE’s standing in developed Western markets such as Europe and the US where many operators are struggling with inadequate liquidity due to the credit crunch. ZTE noted that, in contrast to many financing companies in the West, China Exim Bank has “an advantage by possessing a healthy balance sheet as well as strong financing and credit ability.” In April, ZTE reported an impressive 35 percent rise in sales and a 29 percent jump in net profit for first-quarter 2009 compared to a year ago, and announced it was setting up a new business unit to target high-end telecom markets in Europe and the US. Last week, a report from research firm Dell’Oro Group found that ZTE and rival Chinese vendor Huawei almost doubled their combined share of the mobile network equipment market to over 20 percent in 1Q09 compared to the same quarter last year.