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Why Chinese Companies Violate US Regulations

SIMONE GAO: The DOC letter states that ZTE admitted 380 regulation violations and 96 evasion violations, including the fact that they gave out bonuses to employees involved. ZTE protested they would never take the risk of a penalty of $300 million U.S. dollars for those employees, as though the U.S. allegations were ridiculous. It’s indeed very hard to understand why they still give out bonuses to those employees, why they still sell technologies to Iran and North Korea knowing they would be severely punished if they get caught. What mentality was in those state-owned enterprises?

WEN ZHAO: For Americans, it doesn’t matter whatever motives these Chinese companies had for choosing to repeatedly cheat. What does matter is that they did it. They actually did it and therefore must pay for it. Various possibilities. Maybe their management department just thought Americans wouldn’t mind trivialities like bonuses and wouldn’t follow up. Or they might believe those employees just did what they’d been told to, and punishing would harm their morale. A common mentality in China’s state-owned enterprises or those with governmental backgrounds is they are special and can act like kings. They thought they have the Chinese government behind them, no matter what they do, everything will be fine. And their experience at home and abroad impressed them more so. Since they had never learned a lesson or paid a price, they would go on cheating recklessly. Moreover, a prevailing mindset in China is that cheating is not shameful; it is a shame only when you get caught. ZTE assumed it knew how to cope with the U.S. government, knew their logic of doing things. Speaking of selling technologies to Iran and North Korea, I think this might be under the instruction from the Chinese government. I’m afraid they never dreamed that this U.S. administration would take it seriously.