The founder of Huawei, in a new effort to relieve Western security concerns, said last week that the Chinese tech giant would not comply with Chinese government requests to disclose confidential information about its foreign customers and their communication networks.
Ren Zhengfei spoke in a rare meeting with
foreign reporters as Huawei Technologies Ltd. counters concerns that impend to
hamper its access to global markets. Telecom carriers are preparing to spend
billions of dollars on next-generation technology.
Ren’s comments were the most direct public
response to accusations that his company is controlled by the ruling Communist
Party or is required to facilitate Chinese spying.
“We would definitely say no to such a
request,” said Ren when asked how the company would respond to a
government demand for confidential information about a foreign buyer of its
telecom technology.
Ren said neither he
nor the company have ever received a government request for “improper
information” about anyone.
Asked whether Huawei
would challenge such an order in court, Ren chuckled and said it would be up to
Chinese authorities to “file litigation.”
Huawei is facing
heightened scrutiny as phone carriers prepare to roll out fifth-generation
technology in which Huawei is a leading competitor. 5G is designed to support a
vast expansion of networks to serve medical devices, self-driving cars and
other technology. That increases the cost of potential security failures and
has prompted governments increasingly to treat telecoms communications networks
as strategic assets.
The company’s image
suffered a new blow last week when Polish authorities announced one of its
Chinese employees was arrested on spying charges. Huawei announced it fired the
employee and said the allegations had nothing to do with the company.
Ren is the father of
Huawei’s chief financial officer, Meng Wanzhou, who was arrested Dec. 1 in
Canada on U.S. charges related to possible violations of trade sanctions on
Iran.
Ren said he couldn’t
discuss Meng’s case while it still was before a court. But he said Huawei obeys
the law, including export restrictions, wherever it operates.
Ren expressed
gratitude to Canadian justice officials for their treatment of Meng, who was
released on bail and is staying in a house in Vancouver. He also expressed
thanks to her fellow jail inmates prior to her release “for treating her
kindly.”
“After all the
evidence is made public, we will rely on the justice system,” he said.
“We are sure there will be a just conclusion to this matter.
Two Canadians were
arrested by Chinese authorities on national security charges, prompting
suggestions abroad they might be hostages to secure Meng’s release. On Monday,
a Chinese court announced another Canadian had been sentenced to death in a
drug case after he was ordered retried.
Asked how he felt that
Huawei was linked to accusations Beijing took hostages, Ren said he saw no
connection between the Canadians and Meng’s case.
Dressed in a blue
sport coat and an open-necked light blue shirt, Ren was jovial and animated
during the two hour and 20 minute meeting.
Ren said he became a
Communist Party member in the early 1980s after the state press published
reports about his development of a measuring tool for an engineering project.
Earlier, he couldn’t join because his father was deemed a “capitalist
roader,” but the party was trying to promote young, technologically
capable people after the violent, ultra-radical Cultural Revolution in 1976.
Ren founded Huawei in
1987 to sell imported telecom switching gear to Chinese phone companies after
the PLA disbanded his engineering unit, according to the company.
Despite his party
membership, Huawei makes decisions based on its customers’ needs, Ren said.
“I don’t see a
close connection between my personal political beliefs and our commercial
decisions,” he said.
Huawei’s U.S. market
evaporated in 2012 after a congressional panel said the company and its smaller
Chinese rival, ZTE Corp., were security risks and urged phone companies to
avoid them.
But Huawei passed
Sweden’s LM Ericsson to become the biggest supplier of network gear and its
smartphone brand displaced Apple Inc. last year as the No. 2 global seller
behind Samsung.
The company forecasts
last year’s revenue will exceed $100 billion for the first time. Ren said this
year’s target is $125 billion.
Huawei says it is
employee-owned. Ren said no government entity or any other investor who isn’t a
current or former employee owns “one cent of Huawei shares.”
Ren said Huawei has no
research cooperation with China’s People’s Liberation Army and no dedicated
unit for military sales and he knew of no PLA purchases of civilian technology.
Ren said the security
concerns have yet to have a significant effect on Huawei’s business. The
company has signed 5G contracts with 30 carriers and has shipped 25,000 base
stations, he said.
Huawei has plenty of
opportunities even if it faces higher barriers in some markets, he said.
“If we are not
allowed to sell in certain markets, we will have a smaller operation,” he
said. “So long as we can feed our employees, we are satisfied.”
Ren defended Huawei’s
decision to remain privately held — a status that has fueled questions about
its intentions and who controls it. He said that helped to preserve its
long-term focus on customer service and product development.
Publicly owned
companies care more about a “beautiful balance sheet” while Huawei is
focused on a “strong industry structure,” he said.
“Capital tends to
be greedy.”
Ren also warned
against allowing security concerns to divide the globe into isolated markets
with incompatible technology standards — a scenario some people have suggested
might result from U.S.-Chinese tensions.
“Arbitrarily
dividing the world into two technology camps can only harm the interests of all
society,” he said.
Asked about President
Donald Trump’s suggestion on Twitter that he might intervene in Meng’s case if
that facilitated a resolution of Washington’s tariff battle with Beijing, Ren
said he would wait to see whether Trump takes action.
“As for President
Trump as president, I still believe he is a great president,” Ren said. He
said Trump was elected to cut taxes, which he believed was beneficial for
American industry.
However, he said,
“If companies are getting frightened by the detention of certain
individuals, then investors might be scared away, and that is not in the
interests of the United States.”
Ren said he didn’t
believe Huawei would face U.S. penalties similar to those that nearly drove
smaller Chinese rival ZTE Corp. out of business. Washington barred ZTE from
buying American technology over its exports to Iran and North Korea but
restored access after the company paid a $1 billion fine, replaced its
executive team and installed U.S.-selected compliance monitors.
“What happened to
ZTE, I don’t believe will happen to Huawei,” said Ren. However, he said,
“if it did happen to Huawei, I don’t believe the impact would be very
significant. I believe telecom operators would continue to trust Huawei.”
Ren said Huawei
doesn’t want Beijing to retaliate for foreign restrictions by hampering market
access for Apple Inc. and other rivals.
“In spite of
setbacks in some countries, we are still supportive of China becoming a more
open country.”
