ZTE names new CEO, other top executives to comply with US mandate

ZTE Axon 7 Mini

ZTE allowed to resume some U.S. business activities just months after 7-year ban issued

Xu Ziyang, ZTE's former managing director for Europe, has been appointed ZTE's new CEO, with the company also announcing a new CTO, CFO and head of human resources.

Here's the deal: In early June, the U.S. Commerce Department said it would lift a supplier ban on ZTE that could have put the company out of business.

The US had imposed sanctions on ZTE for illegal sales to Iran and North Korea but the Chinese company agreed to take corrective action.

He has promised a resumption of operations at ZTE as soon as the export ban is lifted by the U.S. government.

The authorization from the U.S. Commerce Department's Bureau of Industry and Services runs from July 2 until August 1. As part of its settlement agreement reached in June with US authorities, ZTE had promised to radically overhaul its management. Previously, Xu served as the CEO of ZTE's German operation, at a time when the Chinese company signed a five year service contract with German telecoms operator E-Plus, displacing the previous provider Alcatel-Lucent.

Booming US jobs market lifts chance of rate rise
The unemployment rate edged up to 4 percent , but this was due to a reported surge of 601,000 people entering the labor force. This suggests the Federal Reserve needs to keep raising interest rates with at least two more rate hikes likely this year.

The Trump administration struck a new deal with the company last month to end the ban in exchange for an additional fine and a drastic management overhaul, among other requirements.

The US said part of ZTE's problem was institutional, so it wanted the heads of all its senior managers.

ZTE has already paid a $1 billion fine, and has agreed to place $400 million in escrow to cover any future misdeeds by the Chinese manufacturer.

Having gained more than 8% Wednesday, following news of the lifting of some trading restrictions by the US, ZTE's share price dipped almost 1.3% in Thursday trading on the Hong Kong Stock Exchange. However the deal could face opposition from United States lawmakers who have already passed a defence bill that included an amendment that could block the rescue plan.

Latest News