ZTE ceases ‘major operating activities’ as seven-year ban on selling it US technology shuts down most of its operations
Because almost all parts of ZTE have some dealings with the US, the seven-year ban on selling American technology to the company has meant a shutdown of a majority of its operations, a source said
Chinese telecommunications company ZTE Corp has ceased “major operating activities” after US watchdogs slapped it with a ban that prohibits American technology companies from selling it their wares.
The Shenzhen-based company said that it maintains sufficient cash as of now and “strictly adheres to its commercial obligations subject to compliance with laws and regulations”, according to a filing to the Hong Kong stock exchange.
But a person familiar with the company’s operations told the Post that the public may have underestimated the impact of the US denial order on ZTE’s business.
ZTE and “related parties are actively communicating with the relevant US government departments in order to facilitate the modification or reversal of the Denial Order by the US government and forge a positive outcome in the development of the matters” it said, without specifying who the related parties are.
The company said it will make announcements of “material developments” in relation to the denial order “as soon as practicable” and advised investors to pay attention to further statements.
The US government activated a suspended export ban last month prohibiting American businesses from selling to ZTE because it breached the terms of a settlement related to its dealings with Iran.
The move plunged the company into disarray, with Chairman Yin Yimin saying that it is in a “state of shock”.