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The West’s spurning of Chinese hardware firm ZTE could backfire

April 17, 2018

British and US officials have issued strenuous warnings about the hardware firm, but that may encourage China to invest more heavily in the company’s future.

Hacking fears: UK officials told the nation’s carriers that ZTE’s equipment poses a threat to national security and could be used to hack infrastructure.

Geopolitics meets tech: Meanwhile, the US Commerce Department banned American firms from selling technology to ZTE after the company breached terms of a settlement punishing it for violation of sanctions on Iran and North Korea.

Newfound nationalism: Such maneuvering is likely to push nations to champion their own tech firms. See, for example, how France creating its own version of secure messaging app Telegram after Russia asked Telegram to hand over its encryption keys.

What it means: ZTE is a major force in helping China develop super-fast 5G wireless data connections, so the firm’s success is important to the nation. The British and American actions against the firm could, Bloomberg notes, have the unexpected effect of triggering Chinese policies that actually buoy it.

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Illustration by Rose Wong

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