Huawei and ZTE are rethinking their lobbying efforts in the West, having significantly reduced their direct investments in such activities over the course of 2017, Reuters reported Monday, citing a number of their financial disclosures. Despite spending nearly $350,000 on lobbying in 2016, Huawei only posted a $50,000 commitment to the segment last year. ZTE spent $90,000 per quarter on lobbying since Q2 2017, while the first quarter of last year saw it invest $240,000 in such activities. Both Chinese original equipment manufacturers are still looking for ways to spread their influence in a less direct manner as they continue sponsoring various telecommunications events and related happenings. Such activities can directly help them propagate their corporate messages but don't have to be disclosed as lobbying investments.
The revised approach to lobbying is likely to be related to recent issues both Huawei and ZTE faced in the United States. The Chinese OEMs have been trying to enter the stateside network infrastructure market for a while now but were met with stiff political opposition from Washington. Huawei's smartphone ambitions ended up being collateral damage in the ordeal that saw AT&T drop their already agreed retail partnership only a day before it was meant to be announced at the 2018 edition of the Consumer Electronics Show held in Las Vegas, Nevada, earlier this month. The second largest wireless carrier in the U.S. is now said to be under pressure to cut all of its commercial ties with Huawei under the threat of losing lucrative federal contracts.
ZTE never had a major smartphone presence in the country despite its long-term cooperation with domestic carriers but is unlikely to strengthen its position going forward. Despite the added scrutiny generated by its networking goals, the company found itself on the federal radar after pleading guilty to violating trade sanctions imposed on North Korea and Iran last year, ultimately settling the matter for nearly $900 million. The two companies are now also targeted by a recently introduced bill that would prevent all U.S. government agencies from purchasing their smartphones and network equipment, with most industry watchers predicting they have little chances of improving their fortunes in the country anytime soon.