Tencent Holdings Chairman and Chief Executive Officer Pony Ma sees ZTE's recent episode in the United States as a "wake-up" call for China chip industry which remains highly reliant on American imports, local media reports. While speaking at a Shenzhen conference on Saturday, Mr. Ma said that while ZTE's stateside troubles have now seemingly been resolved, the Far Eastern country "should pay more attention to fundamental scientific research" and "must not lose vigilance." A similar sentiment has been expressed by various China actors over the course of the last month, with a number of reports indicating local investors will commit more resources to domestic chipmaking efforts going forward, both in terms of research and development.
After the Commerce Department hit ZTE with a seven-year denial order preventing it from purchasing and licensing any kind of American technologies, the company shut down its main operations, having found its smartphone business crippled due to the inability to obtain Qualcomm's Snapdragon chips and an up-to-date build of Google's Android operating system, among other things. The ban was a response to ZTE's failure to fulfill the terms of a 2017 settlement over its admitted conspiracy to violate stateside trade sanctions placed on North Korea and Iran, with the Commerce Department also accusing the company of lying to its investigators.
ZTE repeatedly argued the sanction is unfair because it's a response to an issue that wasn't an intentional act of defiance against Washington and was self-reported after being discovered. Following a degree of mediation from President Trump, ZTE replaced the denial order with a $1.3 billion fine and a broad range of concessions. The move to ease ZTE's sanctions is presently facing significant bipartisan opposition from Congress and has yet to be confirmed by the Shenzhen-based company itself, indicating the episode may still not be over. President Trump argued that providing ZTE with a lifeline after requiring massive concessions from the company and crippling its operations is more than what the Obama administration ever did to regulate the firm which has repeatedly been accused of spying on behalf of China, its majority owner. Critics remain adamant the ZTE deal offers little benefit to the U.S. and runs in contradiction with the President's "America first" political platform.