Since the United States announced its ban on ZTE, the crisis has entered its seventh day. What are ZTE’s latest response measures? Is there any latest statement from the Ministry of Commerce of China and the United States? Is there any turning point in this incident? ——Produced by "Wind Eye Observation" by Phoenix Technology.
The incident of ZTE being sanctioned by the US government continues to unfold. Some people accuse the United States of being "stuck" and imposing a technological blockade on China; some enthusiastically believe that this is a good opportunity for the chip industry to localize; and some others People are busy concocting 100,000 hot articles, and they will step on a few steps indiscriminately before talking about it.
Although this incident is only an isolated case, it reflects the collective anxiety of China's high-tech industry. In particular, a research report on state-owned assets that leaked out recently mentioned that "ZTE's response to the series is very stupid and passive," which triggered a big discussion about right and wrong.
"ZTE Corporation's legal affairs are in name only." Wang Jiang, the author of the article, said in the report that ZTE Corporation's senior executives went to the United States for inspection, and all the minutes of the meeting on exporting equipment to Iran on the computer of the chairman's secretary, and the decisions made by senior executives, etc. were It was stopped during U.S. Customs inspection. According to regulations, confidential information like this is absolutely not allowed to be taken out of the country.
Since the United States issued an export ban on ZTE on April 17, Beijing time (April 16, Eastern Time), today has entered the seventh day. What are the latest measures ZTE has taken? Is there any latest statement from the Ministry of Commerce of China and the United States? Is there any turning point in this incident?
1. Why does the United States want to sanction ZTE?
The U.S. Department of Commerce announced on April 16, Eastern Time, that it would ban U.S. companies from selling parts, goods, software and technology to ZTE for seven years, until March 13, 2025. It is also understood that the British National Cyber Security Center has issued new recommendations warning the telecommunications industry not to use ZTE equipment and services.
As early as March 2016, the U.S. Department of Commerce imposed export restrictions on ZTE, prohibiting U.S. component suppliers from exporting components, software, equipment and other technical products to ZTE because of possible violations of U.S. export controls on Iran. policy.
The reason why the U.S. Department of Commerce sanctioned ZTE was that ZTE violated U.S. sanctions restricting the sale of U.S. technology to Iran.
Reuters reported that ZTE pleaded guilty in a federal court in Texas in March last year to selling U.S. goods and technology to Iran in violation of sanctions. According to ZTE’s previous settlement agreement with the U.S. Department of Treasury, Commerce and Justice, the company agreed to pay a penalty of US$890 million.
U.S. Department of Commerce officials said that according to the agreement at the time, ZTE promised to fire four senior employees and punish 35 employees by reducing bonuses or penalties. But ZTE admitted in March this year that it only fired four senior employees and did not punish or reduce the bonuses of 35 employees.
"This is a very strange logic!" As soon as the US ban on ZTE came out, Hu Xijin, the editor-in-chief of the Global Times, has always supported ZTE. Hu Xijin posted a long article on Weibo, criticizing the United States’ reason for banning ZTE that “ZTE did not withhold bonuses from 35 employees” as having strange logic and seeking to incriminate ZTE. At the same time, he expressed “convinence” with those public intellectuals who argued that the ban on ZTE was reasonable and more diligent than the United States.
Hu Xijin believes that ZTE is willing to fire even four senior executives, so why is it reluctant to deduct the bonuses of 35 ordinary employees? And it actually risked the entire company being killed to protect the bonuses of those 35 people. Please note, it is not about protecting the jobs of those 35 people, but bonuses! Bonuses! If any of us were the leaders of ZTE, would we let the company take such a big risk and give bonuses to those 35 people?
China-U.S. trade war: Why bother to accuse?
Although this news shocked many people in the industry, it was not too surprising. Because, in the past month, the United States has not only taken many but also large-scale actions against China. In addition to the Sino-US tariff and trade war that seems to be about to break out on the table, the United States has never been idle in the past period, especially targeting Chinese companies with a high degree of internationalization such as Huawei and ZTE.
At the Huawei Analyst Conference last week, Huawei’s rotating chairman Xu Zhijun was asked by foreign media reporters about issues related to its business in the United States. Xu Zhijun said that “it is easier to let go of some things.” He believes that some things are not based on Huawei's will. Rather than having no control over it, it's better to ignore it. "No matter what difficulties we encounter, only by doing our own things well and serving our customers well can we survive and develop in the long term."
DeepTech believes that although this news was not confirmed by the US FCC, even Huawei also came forward to clarify This rumor, but it is undeniable that at this time when the fuse of the Sino-US trade war has been lit, whether it is the United States or China, seemingly irrelevant intimidation or provocation, it is possible for the gun to accidentally go off, causing It has become an uncontrollable trade war.
Judging from the seven-year sanctions against ZTE announced by the U.S. Department of Commerce on the 16th, although this incident was originally under ongoing investigation, it is difficult not to believe that the whole thing broke out at this time. Let the outside world think that this is related to the trade war.
2. Responses from the Ministry of Commerce of China and ZTE
Responses from the Ministry of Commerce of China
html On April 17, a spokesman for the Ministry of Commerce of China stated that ZTE has carried out extensive trade and investment cooperation with hundreds of American companies and contributed millions to the United States. Tens of thousands of jobs. We hope that the United States will handle the matter properly in accordance with the law and regulations, and create a fair, equitable and stable legal and policy environment for enterprises.The Ministry of Commerce will pay close attention to the development of the situation and be ready to take necessary measures at any time to safeguard the legitimate rights and interests of Chinese enterprises.
ZTE’s response
html On April 17, ZTE issued a statement stating that it had learned of the US Department of Commerce’s denial of activation order for the company. The company is comprehensively assessing the possible impact of this incident on the company, and is actively communicating and responding to all parties. The company attached great importance to it and immediately established a crisis response working group.On the morning of April 20, in response to the U.S. Department of Commerce issuing an export ban order to ZTE, ZTE issued a Chinese statement on its website and official WeChat, saying that the U.S. Department of Commerce’s Bureau of Industry and Security insisted on imposing sanctions on the company before the relevant investigation was completed. The harshest sanctions are extremely unfair to ZTE and cannot be accepted by ZTE.
stated in a statement that BIS insists on imposing the most severe sanctions on the company before the relevant investigation is completed. It is extremely unfair to ZTE and we cannot accept it! The denial order will not only seriously endanger ZTE's survival, but also harm the interests of all ZTE's partners, including a large number of US companies. The
statement also stated that ZTE will not give up its efforts to solve problems through communication and dialogue, and is determined to safeguard its legitimate rights and interests through all legally permitted means, safeguard the legitimate rights and interests of all employees and shareholders, and fulfill its obligations to global customers, consumers, users, Responsibilities of Partners and Suppliers.
Also on the morning of April 20, in an internal employee letter, ZTE Chairman Yin Yimin also stated that the company had established a crisis response working group as soon as possible to comprehensively assess the impact of the incident on the company and employees, and work with all parties. The two parties maintain active communication and use their utmost efforts to promote the resolution of the incident.
In addition, in the face of many doubts from the outside world, ZTE also reported the entire process of the US sanctions incident for the first time: "In the process of promoting compliance construction, we learn from the lessons of the past, make corrections in a timely manner, and will never make the same mistakes that some management cadres have made in the past. ”
html On the afternoon of April 20, ZTE Chairman talked about US sanctions for the first time: it may immediately put the company into a state of shock.3. ZTE’s disaster
American partners are not doing well either
html On the afternoon of April 20, ZTE held a press conference at its Shenzhen headquarters. In response to the recent U.S. sanctions, ZTE Chairman Yin Yimin said that such sanctions may Immediately putting the company into a state of shock.threatens global operator networks
CICC reported that the U.S. Department of Commerce has imposed an export rights ban on ZTE. If a settlement cannot be reached within 1-2 months, it will affect the normal production and sales of communications equipment, mobile phones and other businesses. At the same time, It will have a certain impact on the current network construction of global and Chinese operators, and may affect the advancement of 5G networks in the future.
ZTE currently accounts for approximately 10% of the global telecommunications equipment market and approximately 30% of the Chinese telecommunications equipment market. ZTE has spare parts inventory for January to February. If a settlement cannot be reached as soon as possible, related businesses will be affected.
5G network
Although most of the world's mainstream operators will announce the commercial use of 5G from 2019, the scale of deployment is not expected to be large, and large-scale commercial deployment should begin in 2020. ZTE is already ready to meet the needs of operators for 5G.
In 2017, ZTE participated in 5G trials jointly with China Mobile, Wind Tre and other operators with its first-generation 5G full range of pre-commercial base station products, and fully passed the second phase of China’s national 5G test, with test indicators far exceeding ITU standards. , joined hands with China Mobile and Qualcomm to complete the world's first IoDT test based on the 3GPP R15 standard, which was well received by the industry.
At the Barcelona Telecom Show in February 2018, ZTE released a new generation of 5G high and low frequency AAU. A number of key technologies fully meet the diverse scenarios and needs of 5G commercial deployment. It has been used in China's 5G national testing and many countries. and applied in 5G tests by regional operators. With the cooperation of multiple parties, this ban will inevitably affect the advancement of 5G networks in the future.
Autonomous driving
Autonomous driving has now become a battlefield for giants to compete for deployment, and ZTE, as one of China's most important telecommunications equipment manufacturers, is naturally not willing to miss the opportunity of autonomous driving.
Previously, Tian Feng, vice president of ZTE Automotive Electronics, revealed that ZTE has a learning target for its autonomous driving layout-Qualcomm. Qualcomm provides the underlying chips, and ZTE provides further productization-hardware controllers with very powerful computing power. ZTE has opened up some capabilities in the wave of intelligent driving to support and help entrepreneurs realize intelligent driving better and faster.
Qualcomm of the United States involves all brands of telecommunications equipment and consumer electronic equipment in the world. Now, Qualcomm’s path should be unworkable.
"Of course, this result has a great impact on ZTE, and ZTE has no good solution. It can only rely on communication at the Ministry of Commerce level. But whether this can achieve the goal for the United States, I think the result is 800 enemy kills and 5,000 self-injury , not 1,000, and the final result is that the United States will suffer a lot," Xiang Ligang, a well-known communications expert in the industry, said in an article.
He believes that ZTE is facing greater difficulties due to such sanctions, but American companies will also face direct losses immediately. For large companies, they can still survive, while small and medium-sized companies may face catastrophe. Big companies like Qualcomm and Intel are also ZTE suppliers. If they lose big customers like ZTE, it will not be good news for these companies.
4. ZTE may not be the only Chinese technology company sanctioned by the United States
In fact, ZTE is not the only Chinese technology company sanctioned by the United States. Among other things, Huawei, which is both an enemy and a friend of ZTE, suffered a setback in the United States some time ago. At the beginning of this year, Huawei mobile phones encountered a series of troubles in the United States. One after another, including ATT, US partners confirmed that they would give up selling Huawei mobile phones.
Carriers such as AT&T and Verizon confirmed that they had given up selling Huawei flagship phones under pressure from US politicians. Best Buy, the largest consumer electronics retailer in the United States, subsequently stopped cooperating with Huawei. The reason they gave is simple: The U.S. government is worried that using Huawei phones is unsafe.
According to an analysis by the American technology media AndroidCentral, there are two reasons why the US government and industry have obstructed Huawei's market expansion.
One of the reasons is that Huawei has a mobile phone chip business. The U.S. government is also worried that some parts of Huawei equipment may be used to monitor communications and harm information security. Another reason for
is due to economic interests.The United States does not want Huawei to take the lead in 5G, the next generation communications technology. In response to the increasing pressure from the United States, not only ZTE is suffering from crisis, but Huawei cannot be immune from this incident. It is just because it has never entered this market before, and it cannot be said that it has suffered a lot of losses now that it cannot enter for the time being.
5. Turnaround
"Lack of cores" is a common difficulty faced by the domestic industry, especially in the context of the trade war. The statements and actions of other parties may affect the progress of this incident. In fact, this problem is not just a problem faced by ZTE. It should be magnified and asked: Why has the chip industry not developed in China? Niu Wenwen, chairman of
startup Dark Horse and dean of Dark Horse College, issued an article through the case of Samsung's investment in the chip industry, saying that the development of chips For the industry, first, it must rely on enterprises and entrepreneurs themselves, and cannot be done directly by the government; second, chip investment has huge returns and takes a long time, so it cannot be done by relying solely on official venture capital and start-up companies; it must also rely on large companies like Huawei BOE; third, The government needs to create a better environment to allow entrepreneurs to make long-term investments with peace of mind.
Of course, the accumulation of core technologies does not happen overnight. ZTE also made a serious reflection at the press conference held last Friday. It also needs to increase investment in research and development, and it is better to seek others than to seek yourself.
Now this matter is not without improvement. According to the latest report from the Wall Street Journal, the U.S. Department of Commerce allowed ZTE to provide additional evidence through "informal procedures." According to reports, a senior official at the U.S. Department of Commerce revealed that the official agency approved ZTE’s request for more information on Friday night.
The official said that according to official regulations, ZTE does not have the right to initiate administrative proceedings, but U.S. officials have agreed to subsequently accept the evidence through informal procedures. However, the official also said that he "does not believe that suspending sanctions is appropriate."
6. Timeline of the Development of U.S. Department of Commerce Sanctions on ZTE
On March 6, 2016, according to Xinhua News Agency, the U.S. government claimed that ZTE and its three affiliated companies violated U.S.-related export bans and were included in the export restriction list. U.S. suppliers export U.S. products, including chips, to ZTE.
In August 2016, the United States once again extended ZTE’s temporary export restrictions.
In March 2017, ZTE announced that it had reached a settlement with the US government. As part of the settlement agreement, ZTE agreed to pay a fine of US$892 million. In addition, a $300 million fine from the U.S. Department of Commerce’s Bureau of Industry and Security has been suspended.
On April 16, 2018, ZTE was suppressed again by the U.S. Department of Commerce and ordered not to directly or indirectly participate in the export of goods, software or technology from U.S. companies for seven years.
On April 17, 2018, ZTE issued a statement stating that it had learned of the US Department of Commerce’s activation denial order against the company. The company is comprehensively assessing the possible impact of this incident on the company, and is actively communicating and responding to all parties.
On April 17, 2018, ZTE issued an internal employee letter stating that the company attached great importance to it and established a crisis response working group as soon as possible.
On April 17, 2018, China’s Ministry of Commerce stated that it hoped that the United States would handle the matter properly in accordance with laws and regulations. The Ministry of Commerce would pay close attention to the progress of the situation and be ready to take necessary measures at any time to safeguard the legitimate rights and interests of Chinese companies.
On April 19, 2018, China’s Ministry of Commerce once again responded to the US sanctions against ZTE: I hope the US will not be too smart, otherwise it will only reap the consequences.
On April 20, 2018, ZTE issued a statement stating that before the relevant investigation was completed, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) insisted on imposing the most severe sanctions on the company. is extremely unfair to ZTE and we cannot accept!
On April 20, 2018, ZTE Chairman Yin Yimin released an internal email, disclosing the entire incident for the first time, and stated that "in the process of promoting compliance construction, we learn from the lessons of the past, make corrections in a timely manner, and will never make the same mistakes as some management cadres in the past." Mistakes Ever Made”
April 20, 2018, Will, Press Officer of the U.S. Department of Commerce. Reinert said in an interview with The Paper that the ban takes effect immediately and there is currently no room for reversal or negotiation. “This is a seven-year ban."
On April 20, 2018, ZTE held a 10-minute brief press conference. Chairman Yin Yimin stated at the meeting that the US ban may cause ZTE to enter a state of shock, which will have a negative impact on all the company's employees, operator customers around the world, and terminal consumers. We are firmly opposed to causing direct damage to the interests of investors and shareholders.
"China." "Promising" and "China is prosperous", few people know that this is the origin of the names of the two companies Huawei and ZTE. Finally, here is the speech of ZTE Chairman Yin Yimin at the press conference last Friday, as he said , such sanctions by the United States directly harm the working rights of ZTE’s 80,000 employees and the interests of 80,000 families, but no matter what, ZTE has a strong motherland and 1.3 billion people behind it who will help and encourage us to overcome this difficulty.
The following is the full text of the speech:
On April 16, 2018, the U.S. Department of Commerce cited ZTE for failing to promptly deduct bonuses and fail to issue disciplinary letters to certain employees involved in historical export control violations. Submitted on November 30, 2016 and July 20, 2017 Based on the false statements made in two letters to the US government, the decision was made to activate the denial order and impose the most severe sanctions on ZTE.
Such sanctions will immediately put the company into a state of shock and will directly affect the company. It affects the work rights of the company's 80,000 employees and directly harms the interests of 80,000 families; it will also affect the company's hundreds of carrier customers around the world, including It will have a direct impact on the performance of long-term service responsibilities by hundreds of millions of end-user users, including tens of millions of American consumers; it will cause significant damage to the interests of the company's 300,000 global shareholders; it will also affect the company's impact on thousands of , partners and suppliers, including U.S. companies, will cause direct harm to the performance of their responsibilities and obligations.
I firmly oppose such a decision by the U.S. Department of Commerce. We are firmly opposed to unfair and unreasonable penalties, and we are even more opposed to the politicization of trade issues. The United States will infinitely magnify minor issues, which will have a great impact on enterprises. The company is highly concerned about this and will use all legally permitted means. to solve the problem. As a global enterprise that grew up in China, ZTE will shoulder the responsibilities that a Chinese enterprise should have and work harder to become stronger, We have a strong motherland and 1.3 billion people behind us, giving us the confidence and determination to overcome various difficulties.
The company's board of directors, management and all employees will unite, perform their duties, take various measures, and do their best to protect employees and employees. In the interests of shareholders, we also fulfill our responsibilities to our customers and partners. After serious reflection, we must increase investment in research and development, and seek for others rather than ourselves. China’s economy continues to develop healthily, so it has a huge domestic market, so it has the ability and confidence to cope with challenges. As a global enterprise, ZTE is opposed to the use of orders by relevant countries. Borderism destroys the global industrial chain. ZTE's products have a domestic market and have the support of 1.3 billion people. We have the ability and determination to tide over the difficulties.
We will never give up! ZTE’s flag will always fly!
