May 6, 2018 / 2:00 PM / 3 months ago

UPDATE 2-ZTE asks U.S. Commerce Department to suspend business ban

(Adds analyst quote, details from ZTE chairman's letter)

BEIJING, May 7 (Reuters) - China's ZTE Corp has submitted an application to the U.S. Commerce Department's Bureau of Industry and Security (BIS) for the suspension of a business ban, it said in a filing to the Shenzhen stock exchange on Sunday.

Washington imposed a seven-year ban on U.S. companies selling components and software to ZTE last month after finding that the Chinese telecoms company breached U.S. sanctions on Iran.

ZTE's exchange filing on Sunday did not give details of its request or say when it had been made, but it did say that the company had provided additional material at the BIS's request.

The Chinese firm is heavily reliant on imports of U.S. chips and the ban on sales threatens to scupper its smartphone business. ZTE has said the ban is unacceptable and threatens its survival.

Last week, Chinese negotiators holding trade talks with U.S. counterparts in Beijing asked the United States to hear ZTE's appeal, take into account the company's efforts to improve its compliance and amend the ban.

U.S. officials have said the action against ZTE was not related to trade policy, but the move has been seen by many in China as part of the broader trade spat playing out between the world's two biggest economies.

DBS Vickers analyst Tam Tsz-Wang said the ZTE request appeared to be procedural.

"(This) doesn't make me turn all positive," Tam told Reuters. "The outcome is more an issue that depends on the negotiation between U.S. and China," he added, declining to speculate.

The ban on sales to ZTE has also underscored China's heavy reliance on semiconductor imports amid growing trade tensions with the United States.

ZTE's Chairman, Yin Yimin, wrote in an internal letter dated May 4 that the company was "proactively taking actions under the guidance of the Chinese government, pushing for a resolution as soon as possible."

"However long a road, it has an end. However long a night, it also has an end. Let's be confident, hopeful, and welcome the light of dawn," Yin added. (Reporting by Min Zhang in BEIJING, John Ruwitch in SHANGHAI and Sijia Jiang in Hong Kong; Editing by editing by Richard Pullin)

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