Huawei and ZTE to get $1.1b in export finance assistance

China will supply local telecoms vendors Huawei Technologies and ZTE up to $1.1 billion in financing to help overseas buyers purchase their equipment.

The funding commitment from the Export-Import Bank of China is part of the nation s drive to boost exports by its small but growing field of homegrown technology companies.

The bank will supply up to $600 million in financing for Huawei, China s number one telecoms equipment maker, and up to $500 million for ZTE, the number two maker, company statements said.
Both companies have recently boosted their exports significantly, mostly through sales to less developed countries like Russia, Egypt and Indonesia.

But Huawei has also made some recent gains in more developed markets such as Germany, France and Britain.

ZTE s 2003 contracted exports totaled more than $600 million, or more than double the previous year. The company said its $500 million in customer financing assistance will apply over the next three years.

Huawei s 2003 actual exports totaled $1.05 billion, or nearly double the total for 2002.

The company, which says it would like to make a public offering eventually, competes by offering prices that are typically 20-40% lower than those of rivals like Cisco Systems, Nortel Networks and Lucent Technologies.

In one of its biggest export successes to date, Huawei signed a deal in December to supply up to HK$900 million ($115.4 million) worth of 3G wireless telecoms equipment to Hong Kong s Sunday Communications.

As part of that deal, Huawei also agreed to supply HK$500 million in financing.

Last week, Huawei disclosed it has purchased a 5% stake in Sunday as a strategic investment.