There is no doubt that no matter how the United States develops the follow-up to the ZTE embargo, this incident will be fully transmitted to future cooperation and trust between Chinese and US companies, and it will create long-term, indelible confidence in the businesses of the two countries. shadow.
Compared with the repeated delays in the ZTE sanctions imposed by the U.S. government in 2016, the U.S. Department of Commerce’s Bureau of Industry and Security directly activated the embargo, which has had a practical impact on ZTE.
On the morning of April 20, the official announcement of ZTE showed that the order issued by the U.S. Department of Commerce’s Bureau of Industry and Security had activated the company’s seven-year embargo on April 15, 2018 (U.S. time).
Afterwards, ZTE again published on the official website "ZTE's statement on the US Department of Commerce's activation refusal order." The statement mentioned that before the relevant investigation was concluded, the US Department of Commerce's Bureau of Industry and Security insisted on the most severe Sanctions are extremely unfair to ZTE and cannot be accepted!
On the afternoon of April 20, ZTE held a conference in Shenzhen headquarters. Yin Yimin, chairman of ZTE Corporation, said that such sanctions will immediately put the company into a state of shock.
Yin Yimin's statement is not an exaggeration. It is not only the device chip, but also the hardware and software design tools developed and used by R&D personnel will be in the scope of the embargo. This means that the company cannot even continue to develop and operate.
Discuss the need for compliance, and the historical background of the friction between China and the United States
The reason why the embargo order was activated has also become a hot topic in the media discussions on these days. According to the information disclosed by the U.S., the direct trigger for the activation of the embargo was ZTE's failure to comply with the agreement, penalties or Reduce the bonus of 35 employees.
This reason, in the eyes of many, is simply unbelievable. Because ZTE had already paid criminal and civil penalties of about 890 million U.S. dollars for sanctions, and a fine of 300 million U.S. dollars was suspended. It may be fined again at any time. In the case of the dismissal of four senior executives, why did he have to pay a huge risk to award bonuses to 35 employees?
However, ZTE’s official statement on April 20th, but also from the side of the United States also confirmed some of the statement. ZTE’s statement mentioned that the company discovered and proactively notified itself, and also dealt with the possible negligence of the person in charge, and quickly correct the problem , hire an authoritative American law firm to investigate independently.
That is, ZTE acknowledged the existence of the incident. However, ZTE believes that the U.S. practice is unfair. The statement stated that the first issue was the company’s self-inspection and timely and proactive notification. Secondly, the relevant investigation is not yet over. The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) Imposing the most stringent sanctions is extremely unfair to ZTE. They cannot accept it!
It is precisely because of the above reasons that the current online public opinion has made a lot of negative comments on ZTE. The topic of corporate compliance has quickly become the focus of everyone's discussion.
Among them, there are articles that argue that with the rapid development of economic globalization, traditional multinational companies have grown into global companies, requiring more and more companies to strengthen compliance management, and compliance competition has become a new competitive rule for global companies. Huge fines have exposed the lag in the ability of companies to control compliance risks and major deficiencies in corporate compliance management systems.
In fact, ZTE did not shy away from compliance issues. At the ZTE Internal Communication and Media Conference on April 20, Yin Yimin also repeatedly emphasized the importance of ZTE's compliance, including its direct leadership compliance committee. It has introduced a number of international top-level consultant teams, invested over US$50 million in 2017, and fully cooperated with the US-appointed independent Compliance Ombudsman.
However, he also frankly stated that export control is a complex system. ZTE's business is complex and its employees are numerous. It is necessary to ensure that each employee’s business will not be negligent at any time. We also need to work harder. In this case, The company's self-examination found problems and timely remedial measures, which in itself reflects the effective operation of our compliance system. Even today, when we get a refusal order, we are still self-requiring the standards of a world-class export control compliance company.
Currently, ZTE has not disclosed the specific reasons for this compliance omission. However, according to Reuters, informed sources said that just one month before the United States announced its sanctions against ZTE this week, ZTE’s chief compliance officer and chief legal officer Officer Cheng Gang has been dismissed.
Of course, while discussing issues of corporate compliance, the incident should be placed under the historical background of the current Sino-American game. Behind the individual accidental events, there are often some inevitability. Some people even said that the current friction between China and the United States Next, even if ZTE did not make a mistake, there may be another similar incident.
At the beginning of this month, the trade war between China and the United States has come and gone. There have been multiple rounds of games. Among them, on April 4, the United States announced the 301 taxation list, covering areas including aerospace, information and communications technology, robotics, and medicine. Machinery and other industries impose an additional tariff of 25%. China immediately counteracts, imposing a 25% tariff on imported soybeans, automobiles, and airplanes.
Some analysts believe that the trade deficit is only one of the goals of this round of Sino-U.S. conflicts. From the viewpoint of restricting products, the U.S. side aims to curb the rise of China in the high-tech field by targeting the 'Made in China 2025'. With the incident of ZTE, it was also a targeted crackdown on China's 5G development. Because once ZTE shocked, it affected the development process of China's 5G communication technology.
Chinese and American companies are injured
In the big country game, the company is most injured. ZTE is undoubtedly the biggest victim.
According to people close to Broadcom, after the embargo was issued by the US Department of Commerce, Broadcom first started the process of discontinued goods for ZTE. It is reported that Broadcom is a large chip supplier of ZTE, and the annual purchase amount is at one billion US dollars. Above. The same insiders from a U.S. software company that provides open source solutions also said that the company received a notice on the 17th that it can no longer participate in any projects related to ZTE.
The official of Intel stated that it has been aware of the orders of the US Department of Commerce and will abide by the requirements of relevant laws and regulations. It is understood that ZTE's core network products, including media gateways, session controllers, and group gateways, are all Based on Intel's high-speed FPGA chip, its user authentication, authorization and billing, operation and maintenance and management platform and other products are all based on Intel's X86 server; In the past, 5G cooperation, Intel and ZTE also have more interactive.
The internal e-mail outflow from Cadence, the world's largest electronic design automation (EDA) company, said that e-mails will cease to be available to ZTE. The loss of self-designed chip-based EDA tools will affect chip R&D.
In addition, Android system software provided by Google, Windows, office software provided by Microsoft, etc. will affect the operation of ZTE.
From a larger perspective, ZTE's fall not only affects more than 80,000 employees worldwide, but also directly affects outsourcing companies, suppliers, etc. attached to ZTE. In the long run, it will also bring about the development of China's communications industry. Significant influence.
Of course, today's globalization, American companies cannot be left alone.
The most direct impact received was ZTE’s suppliers and customers in the US. The data shows that as one of the world’s leading integrated communications solution providers, ZTE has maintained a good cooperative relationship with numerous U.S. suppliers, which is nearly 130,000 in the United States. Hi-tech jobs provide support. Including Google, Qualcomm, Broadcom, Intel, Micron and other technology giants will have varying degrees of losses.
In addition to direct influences, there are also indirect effects. At present, major technology companies in the United States have a large number of businesses in China, and the development of these businesses must be supported by the Chinese government. These companies will inevitably be affected by the relations between the two countries in the future. .
For example, Qualcomm's current acquisition of NXP (NXP) and its continual approval of approval are still being tried by the Chinese Ministry of Commerce. It is reported that Qualcomm has submitted applications on three occasions. The deadline for the most recent approval was April 17 because of concerns that the Ministry of Commerce has rejected the transaction. Qualcomm withdrew its previously filed application on the 16th and resubmitted to gain more time for mediation.
At present, Qualcomm announced that it has postponed the deadline for the M&A transaction from April 25 to July 25. If the approval is still not granted, the 18-month acquisition transaction will fail in accordance with the agreement. Will pay NXP 2 billion U.S. dollars for the termination of the breakup fee.
It is clear that the recent trade war superimposed ZTE on sanctions. If the two countries cannot reach consensus on the political level, both countries will suffer huge losses.
Everyone is in danger and brings a crack in trust between Chinese and American companies
In addition to the influence on the surface, no matter how ZTE is sanctioned, it will bring a psychological shadow to the companies of the two countries. This distrust does not come from purely corporate and business, but everyone cannot predict. The influence of the U.S. and U.S. governments on their respective companies.
From the latest days of social networking, the incident has spread from the discussion of the tech industry circle and the capital circle to the general public. From the concerns of everyone in the future of ZTE to the concerns of the Chinese semiconductor industry, we can see that people have reached people. People are in danger.
The U.S. uses a country to power a single company. There is great disparity in strength and no enterprise can parry. Not to mention the global technology, global standards, and global division of labor in the chip field. No company or even a single country can do its best. Any integrated circuit company in the world Any similar sanctions will stop.
When everyone is in danger, it will also bring cracks in Sino-US companies. Originally in a free and fair business environment, cooperation between enterprises and enterprises has mostly followed the most essential commercial interests, namely, good products and The right price is the basis for procurement. But in the future, large companies in the two countries will have to consider more political factors to balance potential risks.
On April 19, Spokesman Gao Feng of the Chinese Ministry of Commerce also emphasized this point in answering a reporter’s question. He stated that the US act has caused widespread concern about the U.S. trade and investment environment. The United States itself will not only lose tens of thousands of jobs, it will also affect hundreds of thousands of American affiliates, and it will shake the confidence of the international community in U.S. investment and the stability of the business environment. We hope that the U.S. will not become smarter. , otherwise it will only bear its consequences.
Gao Feng also stated that he hopes that the United States will not underestimate the determination of the Chinese side. If the United States persists in adopting the unilateralist protection policy and does not hesitate to harm the interests of Chinese and U.S. companies in an attempt to curb China’s development and force China to make concessions, it is a miscalculation. The Chinese side resolutely The determination and confidence to safeguard the interests of the country and the people will not be shaken in the slightest. We will wage a resolute struggle.