Visitors in front of a ZTE booth in an industry show in Guangzhou, South China's Guangdong Province in December. Photo: VCG

Chinese telecommunications company ZTE has signed a cooperation memorandum on 5G with Tencent to explore the development of 5G technology, according to a report by yicai.com on Wednesday. 

The move shows that companies in China are taking the telecommunications sector to a higher level despite increasing pressure from the US, experts said. 

According to the report, the two companies will establish an innovation lab to focus on research and development (R&D) into 5G applications, including edge computing and network slicing. 

"These areas are on the front line of 5G technology applications, and major internet companies, including Tencent, Baidu and Alibaba, have all made attempts to explore these applications, including in areas like artificial intelligence and smart households," Fu Liang, a Beijing-based telecom industry expert, told the Global Times Wednesday.

The cooperation with domestic internet companies shows increasing demand in China for 5G technology, and it can help local telecommunications service providers seize the opportunity to upgrade their production lines and even move their chipsets to a higher-end market, according to Fu.

"Chinese telecommunication equipment companies still have a lot to do to catch up with their global counterparts, including Qualcomm," Fu told the Global Times. "But the innovation labs and cooperation with first-tier technology companies can help them explore the front line of applications."

Recently, ZTE launched its latest smartphone known as Blade A7, which is equipped with the chipset Unisoc SC9863A, produced by the Chinese mobile chipmaker Unisoc. 

The device has been launched in markets in Latin America, Europe and the Asian-Pacific region, according to a report by ithome.com Monday. 

"Domestic telecommunication equipment makers, including ZTE, are targeting the lower to middle end of the market globally," Fu said. "Their products are usually aimed at younger people with weaker buying power. But with rising   cooperation with leading technology companies, as well as increasing investment on R&D, the industry can expect to reach a higher end-market."

The R&D levels of Chinese telecommunications companies are gaining recognition and momentum from international markets. ZTE has recently secured a contract for an optical transport network from Telefonica Mexico Movistar, and it will cover 51 sites in seven cities in Mexico for the construction of metro OTN, according to a statement by ZTE. 

Making sure that companies in China can upgrade their production lines means that the ultimate key is having integrated design and production companies that can work independently from design to manufacturing.

"It is an ambitious goal that will require a lot of time and investment," Fu said. "But with a forward-thinking attitude and joint exploration, it is a goal that is achievable."