The leaked document has also found the two companies have been given “massive” lines of credit from state-controlled banks, despite both companies claiming that they haven’t been given any financial help.
The document says otherwise however, claiming that ZTE’s lines of credit now amount to US$25 billion, which is exceptionally high for a company with annual sales of just US$8 billion. The commission believes Huawei also benefited from large credit lines, including a $30 billion facility from China Development Bank.
It seems as though these funds are helping the two companies roll out worldwide. Both have been laying down their networks everywhere and pushing phones in emerging markets. This clever implementation will do the companies well in the future – it’s a long term game.
The investigation opened after Belgium based USB modem manufacturer Option inquired to the EU regarding Huawei’s dominance of the modem market.
It later dropped this after Hauwei managed to come to a settlement. However, the complaint got the EU’s ears pricked up and it carried on regardless.
ZTE, which has been rolling out networks with little trouble or worried response globally, including across Europe, has been under the spotlight for a while now for the huge amounts of partnerships its been tying itself into.
In November it signed a purchase agreement with five American chipmakers lasting three years and at a cost of $3 billion. Qualcomm, Texas Instruments, Freescale Semiconductor, Altera and Broadcom will all be supplying semiconductors.
Huawei Technologies hasn’t been shy in conquering the markets. As well as laying down its networks and pushing cheap phones, it also wants to conquer Indian territory. Back in November reports suggested that the company was looking to invest $2 billion in the country within the next five years.
Around this time it angered some in the US government by buying a small technology company without seeking prior approval first.
The acquisition of 3LeafSystems, a San Francisco Bay Area company, which specialises in linking up servers to make more powerful computers and networks, was bought for $2 million.
It seems that market tensions and geopolitics between the China and US are only set to swell.
According to the Wall Street Journal, a battle is under way between the two mega powers because China’s bureaucrats have been coming up with a range of interlocking regulations and state spending aimed at making their country a global technology powerhouse by 2020.
These include big investments in national industries to patent laws that are biased to Chinese companies. There’s also stringent buying rules for companies looking to buy Chinese businesses.