The telecom firm said it had shut down "the major operating activities of the company".
President Donald Trump has waded into a row over Chinese telecoms equipment maker ZTE, promising to get the firm "back into business fast" after it was hit by a ban on buying American hardware and software.
United States commentators say the tone of the tweet is a dramatic shift for Mr Trump, who has consistently accused China of stealing U.S. jobs. It's surprising to see this action confirmed by the President, and such concern over Chinese jobs given that the US Department of Commerce is ostensibly protecting US interests in enforcing its technology export sanctions.
The US administration has barred military and government employees from using smartphones from ZTE and fellow Chinese maker Huawei.
Last week ZTE announced that its major operations had "ceased" after the Trump administration banned American entities from selling critical technology to the company for seven years. Experts have since said the company could be circling the drain.
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At the time, the company said it was still assessing the impact of being placed on the Commerce Department's blacklist.
The concession to Beijing comes ahead of high-level trade talks later this week in Washington aimed at resolving an escalating trade dispute between the world's two largest economies. "We've seen that from the Federal Bureau of Investigation, the intelligence community and DOD that this is just too much of a threat, and that these companies are a threat to USA technological leadership going forward". ZTE had plans to become one of the first vendors in America to offer a smartphone connected to the next-generation wireless network known as 5G.
President Donald Trump earlier this year blocked a deal that would have allowed a Singapore-based firm to acquire U.S. chipmaker Qualcomm, claiming it would enable Huawei to set the pace the global rollout of 5G technology.
As one of the world's largest telecom equipment makers, ZTE relied on United States companies such as Qualcomm and Intel for components. "You should care more about our national security than Chinese jobs".
Then, of course, the President is involved in an aggressive trade dispute with China, which, on the US side, included tariffs on about $60 billion of Chinese goods, the bulk of which were focused on the high-tech industry.