Chinese papers warn against politicizing economics after ZTE ban

FILE PHOTO: Visitors pass in front of the Chinese telecoms equipment group ZTE Corp booth at the Mobile World Congress in Barcelona, Spain, February 26, 2018. REUTERS/Sergio Perez/File Photo

SHANGHAI (Reuters) - Economic issues should not be politicized in order to stifle competition, the official China Daily newspaper said in an editorial on Wednesday after a U.S. decision to ban American firms from selling parts and software to China's ZTE Corp 0763.HK.

The U.S. Commerce Department imposed the ban following ZTE’s violation of an agreement to punish employees after it was caught illegally shipping U.S. goods to Iran.

The China Daily warned that the U.S.-China friction would only get worse if the decision was taken in response to growing trade tensions between the world’s two biggest economies.

“It is understandable that the U.S. seeks to maintain its advantages, but economic issues should not be politicized as a means to curb competition. This should be about the conduct of ZTE, it should not be exploited to denigrate other Chinese companies,” it said.

“If this is Washington’s reply to Beijing’s recent pledge of greater openness, it cannot but worsen trade relations and press Beijing to roll back what it was ready to offer,” the editorial said.

The Global Times, a hawkish state-run tabloid, said the U.S. decision would “stir Chinese society and prompt us to speed up development of chips and other semi-conductor technologies”.

“China won’t allow the U.S. to use chips as a stick against it. China can take steps to replace foreign-made chips with domestic,” it said.

China’s Commerce Ministry said on Tuesday it hoped the United States could appropriately deal with the issue.

Reporting by John Ruwitch; Editing by Shri Navaratnam