ZTE to Continue Increasing U.S. Investment 10% Annually

ZTE Corp. (763), a Chinese phone equipment maker under investigation by U.S. lawmakers, plans to increase investment in the U.S. 10 percent a year, betting on growth in the country’s smartphone market.

“Chinese investment in the U.S. is beneficial for businesses in both countries,” Cheng Lixin, chief executive officer of ZTE USA, said at a conference in Atlanta, according to a statement distributed by Businesswire. ZTE supply-chain partnerships in the U.S. total more than $13.7 billion and will grow, he said.

ZTE and larger rival Huawei Technologies Co., both based in the southern Chinese city of Shenzhen, are being investigated by the U.S. House Intelligence Committee to assess whether the companies’ possible ties to China’s government represent security threats given the sale of their phone equipment in the U.S. Cheng urged U.S. businesses and government to foster open communication, according to the statement, which didn’t mention the congressional probe.

Intelligence Committee Chairman Mike Rogers, a Michigan Republican, and the committee’s top Democrat, C.A. “Dutch” Ruppersberger of Maryland, sent letters this month to both companies seeking details about ownership, operations in the U.S., funding from the Chinese government and connections with Chinese government officials.

ZTE, now the world’s fourth-largest mobile-handset seller, has opened 10 offices in the U.S., and ZTE USA has more than 400 employees across North America, the company said.

To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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