ZTE is a well-known manufacturer of telecom equipment, and while they have seen success in the past they are more than worried about the future with the US looking to impose sanctions on the company. As you can imagine, China’s not happy about this turn of events and are looking to hopefully stop this action before it goes too far.
Hong Lei, China’s Foreign Ministry spokesman, stated that “China is opposed to the US citing domestic laws to place sanctions on Chinese enterprises”. The restrictions were only announced yesterday and were made on the back of allegations that the company planned have sold US-made equipment to Iran in 2012. This is in violation of the US export restrictions with Iran, but this move may have an impact on other companies just as much.
Intel, Qualcomm and Microsoft all supply parts and equipment to ZTE, something which will now require paperwork which will “generally be denied”. ZTE are obviously worried that, since they cooperated with the US since the trading with Iran first surfaced in 2012, they are going to be hit badly by the restrictions, ultimately causing “significant supply problems to ZTE”. The company has already taken a hit with the trading of company shares being halted.