ZTE, a Chinese technology firm, has been hit with U.S. sanctions that threaten to cripple the company. Two lessons can be drawn from this experience. First, that companies disregard U.S. laws at their peril. Second, that a global supply chain is inherently risky and every effort should be made to promote nationally developed technology. It looks as though China will focus on the second. That is the wrong approach.
ZTE is China’s second-largest manufacturer of telecommunications equipment, with a stock market value of $20 billion before its recent troubles. About 60 percent of its revenue comes from network business and 32 percent from consumer business. It is the fourth-largest seller of smartphones in the United States.
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