Huawei head steps from shadows

By Anthony Doesburg

After 25 years of guarding his thoughts, the leader of Chinese telco giant talks business and human rights

Huawei says US hostility is the result of the company's technical superiority. Photo / Bloomberg
Huawei says US hostility is the result of the company's technical superiority. Photo / Bloomberg

After more than 25 years of keeping his thoughts to himself, the founder and head of Chinese telecoms equipment maker Huawei, Ren Zhengfei, on Thursday chose New Zealand for his debut appearance before the press.

The former People's Liberation Army engineer proved to have plenty to say: about the US, which is intent on blocking Huawei from doing business there because of cyber-security fears; about China's progress on human rights; on why he joined the Communist Party; and on New Zealand's place in the scheme of things.

He even mentioned the company's technology. At number two behind Ericsson in the market for telco-grade equipment and the fourth-biggest smartphone supplier after Samsung, Apple and LG, Huawei expects sales this year to reach US$40 billion ($47.8 billion).

The company claims that a six to 12-month technology lead over US rival Cisco allows it to build equivalent equipment of half the size and power consumption, and that its technical superiority underlies US hostility to Huawei.

Ren proved as adept as any politician at answering the question he wanted to hear rather than the one actually asked, although perhaps the interpreter deserves some of the credit for that. The 68-year-old clearly enjoyed holding forth after his self-imposed silence and was anything but bland, throwing in some mild toilet humour and military metaphors.

But he didn't accept that by sniping at the US from distant New Zealand he was following Chairman Mao's doctrine of seizing political power by encircling the cities from the countryside.

Huawei is said to have used Mao's blueprint to expand from Shenzhen in southern China, where Ren started the company in 1987, first into rural areas before entering metropolitan markets in 1998.

"I think that's an analysis of our friends in the press but we don't believe [we're pursuing] a strategy from Mao Zedong. In dealing with Western societies one of the key words is compromise."

In contrast to the huge US market, where Ren acknowledges Huawei has done negligible business with major telcos, New Zealand isn't holding back. Telecom last month signed a contract for Huawei to build its next-generation 4G mobile network; 2degrees' mobile network was built by the Chinese company; it provides Vodafone's fixed-line network; and is a supplier to both the Government's rural and urban broadband projects.

Huawei employs 120 staff in New Zealand, has a US$56 million supply deal with Auckland-based GPS component maker Rakon, and it gave $250,000 to the Prime Minister's Christchurch earthquake fund. That all helps Ren get the attention of our politicians. At a meeting with ICT Minister Amy Adams this week, he told her advanced telecommunications networks would help the country's economic and social advancement.

Ren had hoped to meet John Key, but apparently the request was made at too short notice. But he did see Labour leader David Shearer.

His meeting with Shearer isn't without irony. When Australia shut Huawei out of its national broadband rollout and a US congressional intelligence committee last October gave a damning report on the cyber-threat posed by the company, New Zealand Opposition MPs called for an inquiry into Huawei's role in this country. The request fell on deaf ears.

Key might have Aaron Gilmore to thank for providing an excuse to duck a meeting and avoid appearing too close to Huawei.

Asked about China's human rights record, Ren said there have been steady improvements over the past 30 years.

"The Western world has gone through several hundred years of improving human rights and therefore by its standards there is still big potential and room for China to improve its human rights situation.

"For people like myself who have gone through the cultural revolution and all those complicated periods of time, I think China has gone through tremendous progress."

The US is suspicious of Ren's links to the Chinese Government. However, he said Huawei's relationship with its Government was no different to that of a New Zealand company with ours.

Ren joined the Chinese Communist Party, to which he still belongs, in 1978, because "at that time my personal belief was to work hard, dedicate myself or even sacrifice myself for the benefit of the people and joining the party was in line with that aspiration".

Huawei is a 100 per cent employee-owned company, about half of its 140,000-plus staff having shares. Ren said the company was in the throes of reforming its highly centralised management structure.

"I don't know whether every request from local teams to go to the toilet has got approval from headquarters," Ren said, but in future more say would be given to Huawei staff closest to customers. "To give you an analogy, we're having the people who can hear the gunfire command the operation."

In New Zealand, he said the company would open an innovation centre with Telecom. As for how Huawei might one day break into the US market, Ren said the plan was to focus on the rest of the world first. Mao might well approve.

- NZ Herald

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on production apcf01 at 27 Dec 2014 13:35:44 Processing Time: 532ms