China looks to speed up chip plans as US trade tensions boil

ZTE’s phones may get blocked from using Android

ZTE may not be the biggest or most popular Android OEM today, but it sells a lot of smartphones. But to what extent are the recent disputes linked to Trump's attempts to rein in Beijing's economic ambitions?

Chinese vendor ZTE's business could be heavily impacted if the company fails to reach an agreement with the U.S government over a ban which prohibits U.S companies from exporting components to ZTE for a seven-year period, Earl Lum of EJL Wireless Research told RCR Wireless News.

The US Federal Communications Commission (FCC) named both Huawei and ZTE their communique, while the United Kingdom singled out ZTE for criticism.

Previously fined for shipping telecoms equipment to Iran and North Korea and paying full bonuses to employees involved in such illegal activities, ZTE did not reprimand those staffers and repeatedly lied to the U.S. government about such practices, said Secretary of Commerce Wilbur L. Ross, Jr.

Chinese smartphone maker ZTE Corp's USA woes deepened on Tuesday, as regulators proposed new rules that could cut into its sales, while a supply ban means it may not be able to use Android software in its devices, according to a source.

"If ZTE can work out a deal, the question is how long will it take and how much more money will they need to pay".

But the timing of the latest alerts coincides with a major trade spat between Washington and Beijingthat has been brewing for the past 12 months. The act has fuelled widespread concerns over U.S. investment and business environment, Gao said.

China's Ministry of Commerce responded to the ban quickly, saying it will take necessary measures to protect the interests of Chinese companies.

Plouffe acknowledged that Chinese firms have stronger incentives to introduce security vulnerabilities or give privileged access to networks, but said a far better approach would be for telecoms firms to test all equipment prior to deployment, rather than singling out individual manufacturers.

"In the last few days senior Chinese officials have met to discuss plans to speed up the development of the chip industry", one person with knowledge of the talks said, asking not to be named because of the sensitivity of the matter.

"The Trump administration is helping us Chinese make such a decision". Regardless, it's not looking good for ZTE in the Android world...

Instead, security analysts told DW they expect most telecoms companies to step up tests to determine whether their networks are safe from infiltration. They mention that the Huawei equipment is now monitored by the GCHQ (signals intelligence) for interference, but that adding a second Chinese-based equipment provider would "render our existing mitigations ineffective".

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