Is there a Washington masterplan to frustrate Huawei’s 5G future before it even takes shape? The company is firefighting on various fronts, including accusations of sanctions busting in Iran, allegations about technology theft, and warnings that its networks risk being tapped by the Chinese state. And as far as Beijing is concerned, the efforts are politically motivated, crystallised by the arrest (at US request) of the company’s chief financial officer Meng Wanzhou in Canada last year (see WiC435).
At times Donald Trump has seemed to link her extradition to the US with negotiations on the trade row. That said, he was initially blindsided by her arrest, which undermines suggestions that a carefully orchestrated ‘masterplan’ is at work. Nonetheless, the Chinese still have their suspicions and they won’t have been eased by news of a fresh US criminal investigation into an older row between Huawei and T-Mobile about the stealing of tech secrets.
The announcement was much to the frustration of China’s foreign ministry, which is questioning the motives behind the “reinvestigation”, saying that the legal dispute had already been resolved.
Beyond the US, Huawei has been hamstrung by a series of announcements from governments either banning its 5G equipment from their networks or announcing reviews of whether to do so.
Huawei’s supporters counter that it simply highlights how the Chinese firm is in pole position for the coming rollout of 5G, forcing its critics to turn to political means to prevent it from taking the lead.
Huawei has often been accused of having a tin ear, but to its credit the Shenzhen-based giant has recognised that the mood is hardening and has tried to reassure its international audience. Last week there was a media tour of one of its smartphone factories in Guangdong, followed by another trip to a company campus nearby. But the clearest sign that Huawei is feeling harried has come from the public intervention of its founder Ren Zhengfei, a man who rarely speaks to journalists.
Before last week he had agreed to no more than 10 interviews since starting Huawei in 1987, Chinese state television reports. Over the past 10 days he has had three major sit-downs with journalists, including international ones, putting out a three-pronged message.
Firstly he refuted any suggestion that Huawei is linked to the Chinese military or that it comes under pressure from Beijing to pass on information communicated through its networks. Then he tried to talk down some of Huawei’s progress in 5G as “exaggerated”, presumably in a bid to make it seem like less of a threat. “We all shouldn’t be so anxious,” he added, suggesting that the transformative impact of 5G was being overstated too.
Contradicting this approach, Ren then said he wasn’t too worried about the political opposition to Huawei because the clamour from its customers will force their governments to change course over the longer run.
“They are foolish and will lose money if they don’t buy [our products],” he predicted. “We have many things that the European and American countries need, and they will have to purchase from us.”
In the meantime the plan is to try to forget the politics and let the product do the talking by proving itself in the markets where the company is allowed to sell its networks. “We can shift our focus to better serve countries that welcome Huawei,” he explained.
Known for his hard-charging style (see WiC90) and war-like turn of phrase (see WiC326), the 74 year-old admitted to staff on Monday that things won’t get any easier. “In the coming years, the overall situation will probably not be as bright as imagined, we have to prepare for times of hardship,” he said, warning that staff may need to be laid off as the business climate toughens.
“5G cannot possibly become as easy as 4G,” he predicted. “Maybe a mine will go off here and there.”
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