White House seeks to block Congress from killing ZTE deal

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The ban, which has prevented ZTE from buying the USA components it relies on to make smartphones and other devices, will not be lifted until ZTE pays a fine and places $400-million more in an escrow account in a US -approved bank.

Shares in ZTE Corp. fell 42 percent Tuesday in Hong Kong on their first trading day after the Chinese telecoms equipment maker agreed to pay a $1 billion United States penalty to the USA government and replace its top managers.

The Senate's moves represent a sweeping rebuke of President Donald Trump's push to negotiate a settlement with ZTE, which went against the Commerce Department's initial ban.

All members of ZTE's leadership at or above the senior vice president level also must be terminated, along with any executive or officer tied to the wrongdoing.

As part of the order, ZTE must identify in detail to the Commerce Department all Chinese government ownership and control of ZTE, including public and private shares. A Republican Senator from Arkansas says that ultimately he "would expect that there wouldn't be a ZTE" and that "the death penalty is an appropriate punishment for their behavior". Among other things, it would restore penalties on ZTE for violating USA export controls and bar US government agencies from purchasing or leasing equipment or services from the Chinese company. "The new governance structure will pose challenges for the company's management in the future", Zhongtai Securities said in a note.

China telecom giant ZTE got back into business Wednesday after a two-month suspicion, instantly plunging 39% during Hong Kong morning trade.

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Hong Kong's benchmark Hang Seng index.HSI was down 0.5% in early trade.

ZTE, with a market value of around $20 billion before its shares were suspended in April, is the world's fourth-largest telecom equipment maker after Huawei Technologies, Ericsson and Nokia.

Jeffries said it expected ZTE to pay its penalty in a few days and resume operations next week.

The case has become highly politicized and a key focus of bargaining talks as Washington and Beijing look to avert a trade war. In addition, within 180 days, ZTE must post calculations of the US components in its products on its website in Chinese and English.

ZTE, which is based in Shenzhen, is China's second biggest telecoms maker.

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