Chinese govt. increases ZTE financing by $5bn

PanARMENIAN.Net - Struggling telecoms kit maker ZTE received a timely boost on Tuesday, Dec 4, when the Chinese government effectively stepped in to increase its financing of the firm by $5bn, although the future of China’s tech giants abroad is looking less certain after an SEC clampdown on accounting practices, The Register reports.

Shenzhen-based ZTE announced that the “financing facility” would expand a deal struck with the state-backed China Development Bank (CDB) in 2009 which saw it given access to $15bn.

"ZTE will leverage the CDB’s financial support and grasp the opportunities in the markets for 4G, fixed broadband, enterprise networks and terminals, consolidate our advantages and migrate to the higher value solutions, as we aim to achieve a global top-3 position before 2015,” said ZTE chairman Hou Weigui in a canned statement.

ZTE has been having a rough time of it recently. In October its top executives agreed to a 50 per cent pay cut until the firm returns to profit after predicting a 260 per cent, or 1.75bn yuan (£174m), revenue decline in the first three quarters compared to 2011.

It has also been on the receiving end of some pretty negative publicity, especially in the U.S., with the FBI currently investigating allegations if it broke sanctions by selling American-made tech to Iran.

In addition, a recent high profile House of Representatives Intelligence Committee report branded it and Shenzhen neighbor Huawei a national security risk after the telecoms giants were unable to allay U.S. concerns that they are effectively controlled from Beijing.