China Responds to India’s Investigation of ZTE and Vivo

At a regular press conference on Tuesday, a reporter asked Foreign Ministry Spokesperson Zhao Lijian, “After taking measures against Xiaomi, India has expanded its investigation to other Chinese companies, and is currently probing the local units of ZTE and vivo for alleged financial improprieties. What’s your comment?”

Zhao Lijian said that the Chinese government is paying close attention to this matter. The Chinese government has always required Chinese enterprises to operate legally and compliantly overseas. Furthermore, the government actively supports Chinese enterprises to safeguard their legitimate rights and interests, and India should act in compliance with laws and regulations to provide a fair, just and non-discriminatory business environment for Chinese enterprises to invest and operate within their borders.

According to Bloomberg on Monday, India began its probe of the local units of ZTE and vivo for alleged financial improprieties, thus extending its investigation into China-based firms after recently fining Xiaomi Corp.

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It was reported that India’s Ministry of Corporate Affairs will scrutinize auditor reports and has received information from unnamed sources that indicates potential violations including fraud.

In the case of vivo, an inquiry was sought in April to detect if there were “significant irregularities in ownership and financial reporting” while authorities were asked to study the books of ZTE and submit findings “on an urgent basis”.

India has tightened its scrutiny of China-based firms since 2020. Indian Prime Minister Narendra Modi’s government has banned more than 200 mobile applications from Chinese providers, including shopping services from Alibaba Group Holding Ltd., ByteDance’s popular short video platform TikTok, and many apps used on Xiaomi’s phones. This month the country’s anti-money-laundering agency took control of the bank accounts of Xiaomi Technology India for allegedly breaching foreign-exchange laws, a decision that was put on hold following a court order.