CETC starts integrating Potevio

The China Electronics Technology Group (CETC) has started efforts to integrate the China Putian Information Industry Group, better known as Potevio, into its portfolio, CETC said on 8 July. CETC said the reorganisation is aimed at advancing the development of Chinese information and communication technologies.

CETC's takeover of Potevio – a telecommunications group – was agreed in June. The merger strengthens CETC's position as China's biggest defence electronics corporation, with annual revenues at about USD50 billion. Potevio is also a supplier to China's military, but its main business is in commercial sectors. Both CETC and Potevio are owned by the Chinese government.

Announcing the start of the integration, CETC said the merger is aligned with China's aim in its 14th Five Year Plan (2021–25) to independently develop advanced technologies and to enhance the efficiencies of state-owned enterprises. CETC indicated that the reorganisation would take some time to complete but would mainly be focused on integration of the two corporations' information and communications businesses.

The merger is also thought to be intended to strengthen CETC's resilience to US sanctions. Several of its subsidiaries have been targeted by US directives in recent years, meaning it faces barriers in gaining access to US and international technologies and investment.

CETC plays a crucial role in Chinese defence programmes, supplying a range of electronics capabilities including communication, navigation, radars, and software. The corporation is also an important supplier of components on strategic projects in missiles and space. CETC's revenues in 2019 were about USD35 billion.

Potevio, which posted 2019 revenues of USD18 billion, specialises in wireless communication and is a crucial developer of semiconductors and 5G networks. It is also a supplier of telecommunication systems to the Chinese military.