ZCZC
BCN-31
HONGKONG-US-CHINA-ZTE-TRADE-SHARES
ZTE shares surge 25% as US sanctions lift moves step closer
HONG KONG, July 12, 2018 (BSS/AFP) – Shares in Chinese telecoms equipment
maker ZTE surged more than 25 percent in Hong Kong on Thursday after the
company moved a step closer to having a painful US purchase ban lifted.
The firm had been forced to halt operations and was on the verge of
collapse after Washington announced a seven-year ban on US companies selling
it crucial parts owing to its handling of a sanctions violation.
However, as a favour to Chinese President Xi Jinping, US President Donald
Trump ordered the Commerce Department to ease the penalties and replace it
with an order to pay a $1 billion fine and put $400 million in an escrow
account to cover any future penalties for violations.
It was also ordered to replace its board of directors and retain outside
monitors.
On Wednesday ZTE signed an escrow agreement, meaning the sanctions could
be lifted as soon as Thursday.
The news sent shares in the firm 25.13 percent higher in Hong Kong to end
at HK$13.94. Still, it is sharply down from the HK$25.60 it was at before
trading was suspended after the sanctions were announced in April.
ZTE was pushed to the brink by the initial penalty, which came after US
officials said it had failed to take action against staff who were
responsible for violating trade sanctions against Iran and North Korea. It
was fined $1.2 billion last year for those violations.
Trump’s decision to step in was seen as an olive branch by the president
as trade war tensions started to mount, making it a key element in the spat
between Washington and Beijing.
However, despite the agreement US lawmakers are working to reinstate the
ban, accusing Trump rewarding a company that has repeatedly broken US law and
engaged in espionage.
BSS/XINHUA/HR/1440