Seven things we learned from Huawei's founder this week

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Huawei founder and CEO Ren Zhengfei.
Huawei founder and CEO Ren Zhengfei.

Huawei founder and CEO Ren Zhengfei broke years of silence this week, speaking to international media at a roundtable in Shenzhen, China, as rising pressure from the West puts stress on the company.

Here are seven of the most interesting things we found out from the wide-ranging interview.

1. Huawei won't help governments spy

Ren was clear that the company does not install backdoors in its networking equipment and has never received requests from any government to provide improper information.

A number of western nations, following the lead of the US, have raised security concerns about Huawei equipment, primarily because of the company's close link to the Chinese government and fears over spying and espionage.

"Huawei is an independent business organisation. When it comes to cyber security and privacy protection, we are committed to siding with our customers. We will never harm any nation or any individual. Secondly, China's Ministry of Foreign Affairs has officially clarified that no law in China requires any company to install backdoors. Neither Huawei, nor I personally, have ever received any requests from any government to provide improper information.

"I support the Communist Party of China. But I will never do anything to harm any other nation," he added.

"We are a business organisation, so we must follow business rules. Within that context, I can't see close connections between my personal political beliefs and the business actions we are going to take as a business entity."

He was repeatedly asked what Huawei would do if there was a request from the Chinese government for data on customers or data from its networks.

"We will certainly say no to any such request. After writing this quote in your story, maybe 20 or 30 years down the road, if I am still alive, people will consider this quote and check my behaviour against it, as well as the behaviour of our company.

"We will never do anything to harm the interests of our customers. Apple is an example we look up to in terms of privacy protection. We will learn from Apple. We would rather shut Huawei down than do anything that would damage the interests of our customers in order to seek our own gains."

He was referring to the 2016 case where Apple refused an FBI demand to unlock an iPhone linked to a shooting in San Bernardino, which led to a major legal battle between security and privacy.

2. He is happy Huawei is a private company

Huawei is not listed on any stock exchange and Ren seems to want to keep it that way. He said because the company is not public it is not "overly concerned about beautiful numbers, or a nice-looking balance sheet".

"First, I think there are very few success stories where public companies become strong and big. Capital tends to be greedy. Whenever there is an immediate interest, capital tends to take it away, and that would certainly compromise the long-term pursuit of ideals. We are a private company, so we are able to remain committed to our long-term ideals."

He revealed Huawei's research and development (R&D) investment averages $15 billion to $20 billion per year.

"Over the next five years, we are going to invest a total of more than $100 billion into R&D. Public companies, however, are unlikely to do this, because they focus on making their balance sheets look good. What matters more to Huawei is the future industry structure. Our decision-making system is different from public companies. It is very simple, and we are working hard to make the information society a reality."

3. He only owns 1% of the company

Despite founding the company in 1987, with only 21 000 Chinese Yuan, and growing it into a global powerhouse over the past 30 years, he revealed he only owns a 1.14% stake.

He said the company is owned by 96 768 shareholding employees.

"Our shareholding employees are currently working at Huawei, or are retired former employees who have worked at Huawei for years. There is no single individual that owns even one cent of Huawei's shares without working at Huawei. There is no external institution or government department that owns our shares, not even one cent's worth.

"Today, the total number of shares that I personally have within Huawei is 1.14%, and the stake that [Apple co-founder] Steve Jobs had in Apple was 0.58%. That means there is still potential for my stake to be further diluted. I should learn from Steve Jobs."

4. He is more pro-Trump than expected

Talking about US president Donald Trump as a person, he said: "I still believe he's a great president, in the sense that he was bold to slash taxes. I think that's conducive to the development of industries in the US.

"With the increasing adoption of AI in industry and also in the management of companies, traditional challenges like trade unions, social welfare issues and possible strikes might be mitigated.

"Reducing taxes is conducive to encouraging investment. It is like digging a trench in the ground, which makes it easy for water to flow into that trench. However, it's also important to treat all countries and all companies, which are potential investors, nicely so that they will proactively invest. Benefits from increased investment can offset loss of revenue from tax cuts for the government.

"If countries or companies are frightened, let's say, by the detention of certain individuals, then those potential investors might be scared away, and the favourable environment created by tax cuts will not perform to expectations."

He said he would take a wait-and-see approach to whether Trump will intervene in the case of his daughter, Huawei CFO Meng Wanzhou, who was arrested in December 2018 in Canada for allegedly violating sanctions on Iran.

5. He would rather live forever than retire

When asked about his retirement plans, he jested that "the timing of my retirement will depend on when Google can invent a new medicine that will allow people to live forever. I'm waiting for that medicine."

The company has three rotating chairmen who each take turns to be in charge for six months.

"During those six months, that individual is the highest leader in Huawei. But this highest leader is also subject to the law of our company.

"I don't know exactly who my successor will be. Successors will naturally appear during this circulation, and this process of renewing authority. It's not someone that I appoint. I am not a king."

6. He has no delusions of grandeur

He played down Huawei's role in the US-China trade war, saying his company "is not that important".

"We are like a small sesame seed, stuck in the middle of conflict between two great powers. What role can we play? The trade conflict between China and the US has not had a major impact on our business. We are expected to continue our growth in 2019, but that growth won't be greater than 20%."

He spoke out against the belief that some people in the West have that Huawei's equipment is stamped with some sort of ideology.

"That's as silly as people smashing textile machines back during the industrial revolution, as they thought advanced textile machines would disrupt the world. We only provide equipment to telecom operators, and that equipment doesn't have an ideology. It is controlled by telecom operators, not by Huawei. So I definitely hope that people do not go back to the old days of the industrial revolution when textile machines were being smashed."

When asked about concerns over the number of western nations that are planning to not use Huawei's equipment based on alleged cyber security issues, he said it "has always been the case that some customers accept Huawei and others don't; this is nothing new at all".

7. Despite western pressures, Huawei will survive

"If we are not allowed to sell our products in certain markets, we would rather scale down a bit. As long as we can feed our employees, I believe there will always be a future for Huawei."

He stressed the company's strength when it comes to telecommunications capabilities.

"I believe people will make their own comparison in the end between countries that choose Huawei and countries that don't work with Huawei. Of course, there is no way we can control their choice. In terms of 5G, we have signed 30-plus commercial contracts today, and we have already shipped 25 000 5G base stations. We have 2 570 5G patents. I believe that, as long as we develop very compelling products, there will be customers who will buy them.

"If your products are not good, no matter how strong you go for publicity, nobody will buy them. So what matters to Huawei more is working to streamline our internal management, improve our products and improve our services. I think that's what we should work on to address the challenges of this changing world."

* The full transcript of the roundtable was supplied to ITWeb by Huawei.

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