After experiencing a series of mediation between China and the United States and a major exchange of personnel within the company, ZTE’s lifting of the ban can almost be said to have been settled.
On July 11, the US Department of Commerce said that the United States has signed an agreement with China’s ZTE Corporation to cancel the ban on US suppliers’ business dealings with ZTE in the past three months. ZTE will be able to resume operations and the ban will be in ZTE to the US. Released after paying a $400 million deposit.
Intriguingly, this news was compiled by the foreign media "Voice of America" and compiled by the Economic and Commercial Counsellor's Office of the Embassy of the People's Republic of China on the website; subsequently, the website of the Ministry of Commerce of China reprinted it. To a certain extent, this means that the official Chinese authorities have confirmed and affirmed the news. Affected by this positive news, ZTE A shares opened a strong daily limit, and Hong Kong stocks rose 22.26%.
Lei Feng.com noted that in response to this statement, Douglas Jacobson, a Washington lawyer representing ZTE's supplier, also interpreted:
The US Department of Commerce’s statement today marks the end of this long-standing dispute.
Of course, this seemingly dusty news needs ZTE to use the $400 million guarantee to complete it. Considering that ZTE has repeatedly claimed that it has sufficient cash flow, it has recently applied to the relevant banks for a small loan amount. Presumably, this money is not a problem —— it can be said that the dust is basically settled.
If there is no accident, the US Department of Commerce will issue an official statement when the ban is officially lifted.
For ZTE, in addition to the $1 billion in fines that have been handed over and the $400 million in deposit that will be handed in, the most influential one is the high-level exchange. On June 29, 2018, ZTE announced that the previous 14 board members resigned at the same time. The newly appointed directors were also elected at the 2017 general meeting, including five non-independent directors and three independent non-executive directors. As the new chairman of ZTE, Li Zixue, who has rich background in microelectronics technology research and development.
Lei Feng.com noted that Li Zixue, a former chairman of ZTE, was an airborne soldier. He did not have any experience in ZTE.
In addition, ZTE's big blood exchange also ushered in some so-called "sighs" and "smack" sorrow, which also cast a sad color on the company's fate. Fortunately, it has not died yet, and there are opportunities for rebirth.
It is worth mentioning that it has been 87 days since the US issued a lock-up order to issue the above statement.
The ins and outs of the ZTE incident
Here, Lei Feng.com reviews the entire development process of the ZTE incident in chronological order.
On April 16, 2018 (Eastern Time), the US Department of Commerce announced that it will ban US companies from selling parts, goods, software and technology to ZTE in the next seven years (hereinafter referred to as [Rejection Order]); The reason is that ZTE violated the US sanctions that restrict the sale of US technology to Iran. Specifically, according to a settlement agreement between ZTE and the US Treasury, the Ministry of Commerce, and the Ministry of Justice in March 2017, ZTE promised to dismiss four senior employees and punish 35 employees by reducing bonuses or penalties; The newsletter acknowledged in March 2018 that the company only fired four senior employees and did not penalize or reduce the bonuses of 35 employees.
On the morning of April 17, 2018, the Shenzhen Stock Exchange issued an announcement. Since ZTE Corporation had a major event that may have a significant impact on the stock price and did not disclose it publicly, the company's stock was opened on April 17, 2018. The city has been suspended. At the same time, ZTE's H-share listed company issued an announcement announcing that the company had suspended trading at the Hong Kong Stock Exchange since 9:00 on April 17. On the same day, ZTE issued a statement saying it was informed of the incident and assessed the possible impact of the incident on the company.
On April 20, 2018, the US Department of Commerce said in an interview with the news that the ban came into force immediately, and there is no room for reversal or negotiation; that is, it is expected to wait until 7 years before restarting negotiations.
On April 20, 2018, ZTE issued a statement saying that the U.S. Department of Commerce’s sanctions against ZTE are extremely unfair and unacceptable. The refusal will not only seriously endanger ZTE’s survival, but also harm ZTE’s, including a large number of U.S. companies. The interests of the partners. ZTE also said that it will not give up solving problems through communication and dialogue, and is determined to protect its legitimate rights and interests through legal means.
On April 22, 2018, ZTE stated that it would learn the lesson and regard compliance as the strategic cornerstone and operational premise.
On April 25, 2018, ZTE issued a notice stating that it decided to take certain actions related to US government orders under relevant US law, and A shares will remain suspended.
On May 1, 2018, ZTE stated that it received the BIS guidelines on the procedures for the US Department of Commerce to accept and review the supplementary information submitted by the company; ZTE said that ZTE is expected to provide information to BIS in accordance with the above procedures. The company will consider the administrative or legal measures that can be taken under relevant US law, if necessary.
From May 3 to 4, 2018, Liu He, member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, and the US representative led by US Presidential Special Envoy and Minister of Finance Mnuchin said on economic and trade issues. In a reporter's question on the 4th, a spokesperson for the Chinese Ministry of Commerce said that China had a solemn relationship with the US on the ZTE case; the US side stated that it attaches importance to the Chinese negotiations and will report the Chinese position to the US president.
On the evening of May 4, 2018, ZTE issued an internal letter stating that ZTE had formally submitted an application to the BIS for suspension of the refusal order and submitted additional materials in accordance with the BIS guidelines. ZTE will not give up its efforts to solve problems through communication and dialogue, and will use all means permitted by law to safeguard its legitimate rights and interests. The information transmitted by this internal letter was made public on May 6.
On May 7, 2018, US White House spokesman Sanders announced that Chinese Vice Premier Liu He will lead a delegation to the United States to continue consultations with the US on economic and trade issues.
On May 8, 2018, Chinese President Xi Jinping made an ordinary call with US President Trang. Trump said that he will properly handle economic and trade issues.
On May 9, 2018, ZTE stated that the company's main business activities were no longer possible, and the company's cash was sufficient.
On May 13, 2018, US President Trump posted a message on Twitter, saying that he had instructed the US Department of Commerce to deal with ZTE.
On May 14, 2018, a Chinese Foreign Ministry spokesperson announced that President Xi Jinping's special envoy, member of the Political Bureau of the CPC Central Committee, Vice Premier of the State Council, and Chinese leader of the China-US Comprehensive Economic Dialogue Liu He will visit the United States from May 15 to 19. . At that time, Vice Premier Liu will continue to hold consultations with the US economic team led by US Treasury Secretary Mnuchin. At the same time, the Foreign Ministry spokesperson also said that China greatly appreciates the positive attitude of the US side on ZTE's problems and is maintaining close communication with the US on the implementation of specific details. China and the United States are also maintaining close communication on some specific issues of concern to the US. .
On May 30, 2018, ZTE announced that it would continue to suspend trading.
From June 2nd to 4th, 2018, US Secretary of Commerce Wilbur Ross led a delegation to visit China. The Chinese and American teams continued to hold consultations on Sino-US economic and trade issues.
On June 6, 2018, ZTE announced that it would continue to suspend trading.
On June 7, 2018, US Secretary of Commerce Wilbur Ross announced that the US government had formally reached an agreement with ZTE. Through the agreement, the US ban on ZTE will be lifted, but ZTE needs to meet the following preconditions: change the board of directors and management within 30 days; pay a fine of 1 billion US dollars; provide a deposit of 400 million US dollars; accept the selection by the US Assistant Compliance Officer for a period of 10 years.
On June 13, 2018, ZTE announced that it will hold a shareholders meeting on June 29.
On June 29, 2018, ZTE Corporation issued the Announcement of the Resignation of Directors of ZTE Corporation. The original 14 directors including Chairman Yin Yimin resigned collectively. The newly appointed directors were also elected at the 2017 Shareholders' Meeting. It includes 5 non-independent directors and 3 independent non-executive directors. As the new chairman of ZTE, Li Zixue, who has rich background in microelectronics technology research and development.
On the evening of June 29, 2018, ZTE announced that it had agreed to apply for a comprehensive credit line of RMB 30 billion from Bank of China Co., Ltd. and apply for a comprehensive credit line of USD 6 billion from the Shenzhen Branch of China Development Bank.
On July 5, 2018, ZTE disclosed the resolutions of the 32nd meeting of the 7th Board of Directors, and agreed to hire Xu Ziyang as the president of the company, and agreed to hire Wang Xiyu, Gu Junying, Li Ying as the company's executive vice president; and agreed to hire Li Ying Also serves as the company's financial controller. Agree to no longer hire Zhao Xianming as the company's president.
On July 11, 2018, the US Department of Commerce said that the United States has signed an agreement with China's ZTE Corporation to cancel the ban on US suppliers and ZTE for nearly three months. ZTE will be able to resume operations and the ban will be in ZTE. Released after paying US$400 million in deposit to the United States.