China Telecom Vendors conquering the World

Huawei Technologies has lined up a $30 billion credit line from the China Development Bank (CDB) to help it win telecom contracts abroad. The two companies yesterday signed a “strategic partnership agreement”, expanding a $10 billion loan deal from 2004, the official Xinhua news agency reported.

Earlier this year Huawei’s smaller rival ZTE secured $15 billion in credit from the CDB and another $10 billion from the Export-Import Bank of China, also to help it win foreign contracts.

The lines of credit create a huge war chest for the two suppliers, enabling them to extend low-interest loans to help their customers many of whom are in emerging markets, or are feeling the effects of the recession to buy their equipment.

CDB was putting into practice the government’s globalization strategy. As a major medium to long-term investment bank, CDB implements the country’s globalization strategy, supporting strong companies to expand their businesses abroad.

Since the financial crisis broke a year ago, Huawei and ZTE had grasped the “counter-cyclical development opportunity” to win business from foreign service providers. No wonder they are the leading players in emerging markets having in excess of 60% market share in Africa.