Recently, the U.S. Department of Commerce announced the adoption of export control measures for ZTE Corporation. There is a problem here. We must make it clear whether the United States wants to block ZTE, or does it point to China's telecommunications equipment manufacturers?
The United States blocked the use of ZTE
Before the United States imposed sanctions on ZTE, the reason was that ZTE sold US technology to Iran. The two parties later reached a settlement. However, ZTE needs to pay criminal and civil penalties of approximately US$890 million. This time, the United States blocked ZTE because it did not strictly comply with the settlement agreement. Dismissed four senior employees and did not penalize or reduce 35 employee bonuses. This is the so-called 'real hammer'.
In principle, China is not an American allies, and now is not the Cold War era. Chinese companies are not obligated to implement the US resolution. However, the strong US position is the reality that many large companies have to consider. Many companies that have reached the so-called 'reconciliation' with the United States In private, they all suffer from bitter water.
Compared with ZTE’s sanction, a similar example is that in the mid-1980s, the United States imposed a three-year ban on Toshiba’s export of CNC machine tools to the Soviet Union and prevented Toshiba Machine’s products from entering the US market. ZTE and the US The settlement plan was to pay a large amount of fines, and Toshiba shared some military technology with the US for the cooperation of the two sides to develop new types of fighter jets. Take Toshiba’s case, the sanctions are the US to obtain benefits based on its rules. Means, because at that time the United States considered itself to be behind Japan in the fields of semiconductor technology, optical fiber technology, and intelligent mechanical technology. So is this the same thing for the ZTE event? At least it can be said that, on the issue, the real hammer is not true.
Even with the agreement between the US and ZTE, the United States has better, more reasonable, and more appropriate measures. China has taken note of the measures announced by the US Department of Commerce regarding ZTE’s export controls. A spokesman for the Ministry of Commerce stated that China has always required In the process of overseas operations, Chinese companies abide by the laws and policies of the host country and operate the business in a lawful and compliant manner. We hope that the US will properly handle the matter in accordance with regulations, and create a fair, equitable and stable legal and policy environment for the company. The Chinese side reminded the U.S. In accordance with regulations, it is because the U.S. side has made a fuss about this issue.
U.S. Sanction Scale Unusually Blocked Another Purpose behind ZTE?
It is reported that ZTE has started to confirm one by one each production process currently underway. Whether the supply chain department or other activities involve the production of US-originated products, and is currently applying to the U.S. Department of Commerce for providing explanatory guidance on the partial prohibition of passwords. For enterprises, this is a very pragmatic attitude, and we hope that the problem can be solved as soon as possible. However, the position of the Ministry of Commerce “paying close attention to the progress of events” is also very important. We must be ready to take necessary measures to safeguard the legality of Chinese enterprises. Equity. Because behind the ZTE incident is not simple.
△ April 17, 2018, Shanghai, ZTE Communications Building (Photo/Visual China) April 17th, 2018, Shanghai, ZTE Communications Building (Photo/Visual China)
ZTE has 25%-30% of components from U.S. suppliers, but most of the core components rely on U.S. suppliers. ZTE's mobile phone chips, baseband chips, radio frequency chips, memory chips, mobile phone glass, optical components and other core zero Parts come from high-tech, Broadcom, Intel, Micron, Oracle, Corning and other technology giants. They can't find alternative products that can maintain the same competitiveness in the short term. Among the core components of ZTE's communications equipment, some of the components of the base station are 100% from US companies, ZTE has 1-2 months of stocking. Failure to reach a settlement with the US at this time will affect the production of ZTE's equipment. This will affect the telecommunication industry, especially the construction of China's operator networks. This is a question we must ask. Should the United States block ZTE or China's telecommunications equipment manufacturers? Even point to the development of China's telecommunications industry because the scale of US sanctions is too abnormal, even far beyond ZTE's cooperation with U.S. partners in the United States. Imagination.
ZTE Corporation has conducted extensive trade and investment cooperation with hundreds of U.S. companies and has contributed tens of thousands of jobs to the United States. The U.S. act has aroused general concerns about U.S. trade and investment environment. The U.S. acts are directed against China. However, the ultimate harm is the United States itself. It will not only lose tens of thousands of jobs but also affect hundreds of thousands of American affiliates. It will shake the confidence of the international community in US investment and the stability of the business environment.
We will pay close attention to the ZTE incident. However, the United States does not care about the interests of its own companies. It really makes us shudder. At the same time, it also makes us more aware that we must increase our determination in independent research and development to accelerate the pace of core technological breakthroughs.