China’s ZTE gets operation back on track while global backlash mounts
The telecoms equipment maker recorded a net loss in the first half, the result of a US supplier ban that caused the halt of operations
ZTE Corp has said it expects to post a profit in the third quarter after reporting its worst-ever first-half loss on Thursday, in what is the Chinese telecommunications equipment supplier's first step towards normality in the wake of a US ban that had shut down its operations for months.
The Shenzhen-based company, which is the second largest telecoms equipment maker in China, said it expected to record a net profit of between 24.2 million yuan (US$3.54 million) and 1 billion yuan for the three months ending September 30, compared to 1.61 billion yuan in the same period of 2017, according to a release on its website.
Its newly-elected executives told shareholders on Tuesday that production had returned to normal. But Chinese telecoms equipment suppliers such as ZTE and Huawei Technologies, are likely up against a global backlash as governments around the world take action to contain their businesses.
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The critical role ZTE and Huawei are playing in the development of the next-generation 5G telecoms networks has caused concerns among governments about the possible direct ties the companies may have with Beijing.
Although it has lifted a ban that stopped ZTE from buying US components, Washington has prohibited government entities from using ZTE and Huawei network gear, and Australia and Japan have also said in recent weeks that they would stop the firms from providing 5G equipment in their countries.
Despite the expectation of a net profit in the third quarter, ZTE still recorded a net loss of 6.8-7.8 billion yuan for the first nine months this year.