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ZTE chairman Yin Yimin issued a call for calm to employees after the United States government banned American firms from selling parts to the Chinese telecommunications equipment giant for seven years, a move that could wreck its plans to build everything from smartphones to gear for enabling 5G networks. "Instead of reprimanding ZTE staff and senior management, ZTE rewarded them".

The United States Department of Commerce (DOC) has just announced a ban on USA exports to ZTE, which means that the Chinese manufacturer will no longer be able to use technology or components from companies such as Dolby or Qualcomm, including the renowned Snapdragon processors.

The ZTE issue adds up to the U.S.

The Chinese telecommunication equipment maker was accused by the US Department of Commerce of making false statements during an investigation into sales of its equipment to Iran.

The Chinese company paid $890 million in fines and penalties after it pleaded guilty past year to conspiring to violate US sanctions by illegally shipping USA goods to Iran.

Secretary of commerce Wilbur L.Ross Jr said: "ZTE misled the department of commerce".

"ZTE acknowledges the mistakes it made, takes responsibility for them, and remains committed to positive change in the company", ZTE's Chairman and Chief Executive Officer Zhao Xianming said at the time. In addition to these monetary penalties, ZTE also agreed a seven-year suspended denial of export privileges, which could be activated if any aspect of the agreement was not met and/or if the company committed additional violations of the Export Administration Regulations (EAR).


The sales ban came on the same day that it was revealed that the UK's National Cyber Security Centre (NCSC) has warned telecoms companies and other network operators of its "security concerns" with networking hardware made by Chinese vendor ZTE.

Mr Trump has repeatedly accused Beijing of "manipulating its currency", tweeting: "Russia and China are playing the Currency Devaluation game as the US keeps raising interest rates".

According to Reuters, US manufacturers are estimated to provide up to a third of the components in ZTE's network equipment and smartphones, so the US action could have a disastrous impact on the Chinese business.

US firms are also likely to get caught in the crossfire, with the fallout set to hit Qualcomm Inc, which provides the lion's share of chips inside ZTE smartphones. ZTE was a regular purchaser from Qualcomm Inc., Intel Corp., Acacia Communications and lumentum Holdings Inc. It has relied on US companies including Qualcomm Inc, Microsoft Corp and Intel Corp for some components.

ZTE has sold handset devices to USA mobile carriers AT&T Inc, T-Mobile US Inc and Sprint Corp.

The U.K.'s national Cyber Security Centre warns the telecommunication companies of the country that, "National risks from ZTE equipment and services can not be mitigated".


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