China’s ZTE, Saved by U.S., Has a Checkered Past and Shaky Future

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This was hardly the first time ZTE has faced allegations of questionable business conduct. In Kenya, a contract between ZTE and the local police was canceled in 2013 because of overbilling, a decision the company appealed but failed to overturn. In Algeria, two ZTE executives were convicted of corruption in 2012. At the time, ZTE said it had no comment on the Algerian ruling.

Zambia ended a contract with ZTE in 2013, after finding that an auction had not taken place, leading to suspicions that the project’s costs had been inflated. In the Philippines, the company was accused in 2007 of bribing officials including the country’s president at the time. (The corruption case against the president was later dropped because of a lack of evidence.)

In response to these and other cases, Norway’s sovereign wealth fund, one of the world’s largest, said in 2016 that it would exclude ZTE from its investments. The fund’s ethics council said there was “an unacceptable risk that ZTE has been involved in gross corruption and that the company may again become involved in similar practices.”

The company’s record is not unblemished in its home market, either. A local manager for China Mobile, the country’s largest wireless operator, was found guilty last year of accepting bribes from several companies, including a ZTE subsidiary. ZTE did not comment at the time.

It has other issues in the United States, too. American officials have for years voiced concerns that ZTE equipment may be used by the Chinese government for espionage or network disruption, an allegation also leveled against the firm’s main Chinese rival, Huawei.

As a result, large American mobile companies such as AT&T are effectively barred from buying gear from the two companies, and small American carriers may soon be as well, if a proposed Federal Communications Commission rule goes into effect.

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