The US government will temporary lift the trade sanctions that it imposed against China's ZTE corporation. This move will somehow ease the tension between the two giant countries.
The sanctions were first given by the US government alleging the Chinese telecommunication supplier of exporting American technological goods to other nations including Iran. According to Reuters, the US commerce department has investigated ZTE and found out that it violated the export control regulations. The Chinese company had signed a contract to ship millions of dollars worth of American-made hardware and software devices to one of Iran's largest telecom provider.
The violations made by the Chinese company has placed them on the blacklist which in turn hinder their ability to buy US components as well as softwares, gaining protest from the Chinese government itself. Beijing has been asking to remove ZTE on the blacklist.
As a result of the sanction, ZTE has cancelled the release of its earnings of 2015 due to the restrictions brought about by the controversy. As reported by China Topix, the sanctions are threatening ZTE's global supply chain and can create a severe shortage of spare parts for the company in the long run.
But according to a US senior Commerce official, they are now doing their part in resolving the issue which will be based on the binding commitment of ZTE between the US governments. He characterized the steps as active and constructive. He clarified though that the removal of ZTE from the blacklist would be temporary in nature and would only be maintained only if ZTE will comply with its promises as per The Wall Street Journal.
The Chinese company, on the other hand, issued a statement that it has been actively cooperating with the relevant US departments and has been making a constructive discussion for the past weeks. The trading shares of the company which is listed in Hong Kong has been halted since the issue broke out last March 7.
