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Security rivalry will strain China-US commercial ties

Tuesday, March 22, 2016

Significance

The restrictions, which resulted from a nearly four-year investigation, were levied due to ZTE's alleged violation of sanctions prohibiting the sale of US-acquired information technology equipment to Iran. Chinese officials denounced the US decision to enact the restrictions, stating that it threatened to affect trade ties negatively and harm bilateral relations. Bilateral commercial and business interests have underwritten the development of the China-US relationship and are increasingly imperilled.

Impacts

  • Beijing-Washington economic rivalry poses regulatory risks for US-based suppliers of Chinese corporate entities.
  • US outreach to South-east Asia may renew Chinese efforts to secure bilateral and multilateral trade agreements in the region.
  • Increased China-focused national security regulation offers commercial opportunities for Western legal services firms.
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