ZTE seeks stay of US ban, asks employees to ‘welcome coming of dawn’

ZTE sent an internal memo to its employees after the first round of China-US trade talks concluded, informing them of steps the company has taken to try to resolve a seven-year US export ban that has threatened its survival

PUBLISHED : Saturday, 05 May, 2018, 9:58am
UPDATED : Saturday, 05 May, 2018, 2:00pm

ZTE Corp, facing a seven-year ban on buying crucial American technology, said it has requested a stay of the denial order that forbade US companies from doing business with the Chinese telecommunications equipment provider, asking its employees to be “full of hope to welcome the coming of dawn”.

The Shenzhen-based telecommunications equipment provider has been “proactively communicating with relevant departments of the US government”, ZTE said in an internal memo to employees on Friday seen by the South China Morning Post. The company is striving to resolve the matter “as soon as possible” and will continue to maintain close communication with relevant parties, the memo said. 

China warns US against irresponsibility after putting ZTE ‘in a state of shock’

The company has also submitted supplementary documents in according with guidance from the US Department of Commerce’s Bureau of Industry and Security (BIS), according to the memo, which was sent by the Emergency Response Team set up by the company to deal with the fallout from the ban.

ZTE declined to comment on the memo.

The memo was sent after senior officials from China and the US concluded their first round of trade talks in Beijing on Friday with no breakthrough, agreeing only to have more dialogue to ease tensions. A short statement released by state-run Xinhua said both sides were still “very divided” on some issues and “more work needed to be done”. Trade tensions have been rising between the world’s two biggest economies as US President Donald Trump sought to reduce China’s trade deficit with the US. 

US and China still divided as trade talks fail to make breakthrough

The two sides “reached some consensus” and exchanged views on expanding US exports to China, bilateral investment, intellectual property protection and the imposition of tariffs, the statement said, without elaborating. A statement from the White House said the US delegation held “frank discussions” with Chinese officials on rebalancing the bilateral economic relationship. 

China’s Ministry of Commerce said in a statement earlier on Friday that Chinese officials had made “solemn representations” over the ZTE case to the US delegation. 

In its memo, ZTE said that after learning of the US order on April 16, as a global company growing up in China, it has been acting in line with the government of China, and is taking steps under its guidance to facilitate the resolution of the issue.

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The company reiterated that it will strive to resolve the export ban through dialogue and safeguard its legal rights and interests.

After learning of the denial order, ZTE immediately delivered a compliance code of conduct to all employees, and the company has suspended all business activities with US partners as required under the order, according to the memo.

ZTE row shows China needs international tech to shine

ZTE last month criticised the decision by the US to impose the export order as “extremely unfair”. The US government had banned sales by American hi-tech suppliers to ZTE because the Chinese firm failed to discipline 35 employees involved in the illegal sale of telecommunications equipment to Iran, paid them full bonuses and lied about it to US authorities.

ZTE chairman Yin Yimin said last month the US export ban has put the company “in a state of shock” as it would damage the interests of the firms’ employees and shareholders, as well as telecommunications network operators and smartphone users around the world.

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The company has “reflected on its activities, learned the lesson and strengthened compliance and internal controls,” according to the memo, which ended with an exhortation to the company’s 80,000 employees.

“However long the road, there is an end point, however long the night, there will be a conclusion, let us be steadfast and be full of hope to welcome the coming of dawn,” the memo said.