US-China trade war 'deeply humiliating', says ZTE executive to staff

A departing senior executive at China’s ZTE Corp, which is fighting a crippling US supplier ban, said in a letter to staff that his departure amid a Sino-US trade war was “deeply humiliating”.

 

Zhang Zhenhui was one of scores of executives at China’s No 2 telecommunications equipment maker ordered to leave as part of a $1.4 billion settlement deal ZTE made with the US in June in order to end a seven-year supplier ban.

 

ZTE, which relies on US suppliers for core components, had to cease major operations in April after the US government imposed the ban, saying the firm broke an agreement to discipline executives who conspired to evade US sanctions on Iran and North Korea.

 

As part of the settlement, ZTE agreed to pay a $1 billion fine, put $400 million in escrow, and hire a US-appointed compliance monitor. It also agreed to replace its board, remove all members of its leadership at or above senior vice-president level along with any executives associated with the wrongdoing, within 30 days. Zhang, who was one of five executive vice presidents at ZTE and in charge of sales and marketing, issued a farewell letter to staff, employees said.

 

In the letter, which was circulated online on Saturday, Zhang recounted his 18 years at ZTE and said he had no responsibility in ZTE’s compliance violations. “In the environment of a Sino-US trade war, in the ‘white terror’ of a technology war, all executive presidents including me have signed termination contracts to formally leave the company yesterday,” Zhang said.

 

A spokeswoman for ZTE declined to comment. Reuters could not immediately contact Zhang.

 

ZTE was found guilty in 2016 of having sold products with US technology to restricted countries including Iran, violating US export rules.

 

It managed to avoid a seven-year supplier ban after reaching a settlement agreement with the United States in March 2017 that included a $1.2 billion fine. The United States reinstated the ban this April after it said ZTE had failed to punish the executives involved as agreed.