State media calls for Chinese citizens to stand up for phone makers ZTE and Huawei as backlash grows

New US regulations affecting Chinese technology companies have raised the stakes of an ongoing trade dispute between the world’s two largest economies.



After banning US companies from selling parts, software or services to mobile phone maker ZTE, US regulators said on Tuesday they would also bar government programs from buying from any company deemed a security threat. The measure is likely to affect ZTE as well as the Chinese smartphone maker, Huawei, two of China’s largest telecommunication companies.

China's ZTE deemed a 'national security risk' to UK Read more

China responded on Wednesday that it has contingency plans for dealing with trade frictions. Yan Pengcheng, spokesman for the National Development and Reform Commission (NDRC), China’s economic planning agency, said at a news conference that any impact on the Chinese economy from a trade dispute would be limited and manageable.

The US commerce department this week imposed a seven-year-ban on selling products and services to ZTE. The department said ZTE had violated an agreement to sanction personnel who sold sensitive US technology to Iran and North Korea. ZTE, which sources as much as 30% of its parts from the US, could be crippled by the ban.

The latest moves by the US open another chapter in rising trade tensions between Washington and Beijing. US President Donald Trump has threatened punitive tariffs on $150bn of annual Chinese imports, while China has threatened retaliatory tariffs on US exports such as soybeans, vehicles and aircraft.

Both sides have signalled some willingness to negotiate. In a speech earlier this month, Chinese President Xi Jinping promised to further open up the Chinese economy, protect intellectual property and loosen restrictions on foreign investors in manufacturing sectors such as the auto industry.

China, home to the world’s largest auto market, requires foreign carmakers to partner with local manufacturers and share ownership. The NDRC this week released a plan to phase out those rules by 2022 and to scrap them entirely for electric vehicle companies by the end of this year.

Still, US regulations on Chinese technology companies could add to a growing backlash in China. Messages on social media have called for consumers to boycott popular US establishments popular such as McDonald’s, KFC and Apple.

The editor of the state-run tabloid Global Times, known for its nationalist editorials, called on Chinese citizens to stand up for its technology companies. “Tonight, me and the staff at Global Times are all ZTE,” he said on Weibo in a widely shared post.