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Home / Technology

China's technological challenger

By Peter Griffin
14 Mar, 2007 04:00 PM4 mins to read

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Shenzen's 'white house', at the end of a long boulevard, is Huawei's training centre.
Shenzen's 'white house', at the end of a long boulevard, is Huawei's training centre.

Shenzen's 'white house', at the end of a long boulevard, is Huawei's training centre.

KEY POINTS:

The Chinese province of Shenzhen is like an industrial version of Las Vegas - modern, wealthy and slightly detached from reality.

Americans wearing the uniform of Silicon Valley - chinos and checked shirts - dine at the Crowne Plaza hotel where they are served by Chinese waiters dressed as Venetian boatmen.

In the built-up, inner-city streets nightclubs butt up against gleaming office blocks. Like everywhere in China, the traffic is diabolical.

The foreigners in the plush hotels are here for one thing - to ally themselves with the fast growing companies working in the new powerhouse of China's IT industry.

Since it was formed as a special economic zone in 1979, Shenzhen, situated a half hour's drive from Hong Kong, has developed into a sprawling industrial complex that's home to at least 10 million people.

On Shenzhen's outskirts is a microcosm of the city itself - the 1.5sq km campus of Huawei, a maker of telecoms and networking equipment and one of the companies at the forefront of China's technological revolution.

A tour of the campus unveils Huawei's earnest, if eccentric, personality. Balinese huts occupy Huawei's sweeping exhibition centre, while the campus itself is made up of an unusual mix of buildings - medieval-style Chinese meeting houses and plate-glass skyscrapers.

At the end of a sweeping boulevard is an ornate building fronted with stone columns. Huawei workers call it "the white house" and, while its resemblance to the Washington home of the US President is striking, the building's role is less grand in the scheme of things - a training centre.

The logistics operation is particularly impressive. Robots zoom up and down corridors in a large warehouse carrying pallets of equipment to the dispatch bay for shipping to customers around the world. Few humans are involved in the process.

When I visit the empty cafeteria, which has seating for a thousand, the chefs are preparing lunch. When I return two hours later, the place is still empty, the chefs tidying up. They'd fed an army in the intervening period.

The life of the Huawei worker is a much sought-after one in China. Some 20,000 people work at the Shenzhen headquarters, half of them in research and development. The engineers are paid well by Chinese standards.

Huawei itself offers its workers great perks. The campus has thousands of small but modern apartments which can be rented for as little as $200 a month. There's the Huawei University, a hospital, restaurants and bars to entertain the workers. Huawei has grown into a US$11 billion company that derives 65 per cent of its revenue from overseas markets since being formed in 1988.

Its founder, Ren Zhengfei, rarely talks to the media - my Huawei hosts laugh when I request an interview. Such a low-key approach from a company boss is a world away from the high profiles of Steve Jobs and Bill Gates. But then Huawei, unlike Apple and Microsoft and despite its considerable size, is a private company.

It reports its revenue but keeps other information tightly under wraps.

Huawei's business in New Zealand is relatively small - it signed a $5 million deal with Vodafone to supply mobile data cards and has sold equipment to Ihug, TelstraClear and Telecom.

Its biggest prospect for further business is with Econet Wireless, which wants to become the country's third mobile network operator.

But globally, Huawei has picked up major contracts to build mobile and fixed-line networks, seriously challenging the traditional European and American incumbents.


Red Giant

Huawei Technologies
* 62,000 employees globally.
* US$11 billion sales in 2006.
* Serves 31 of the top 50 telecoms operators.
* Puts 10 per cent of revenue into R&D each year.
* In 2004, secured a US$10 billion loan from the Chinese Government to help customers finance network purchases.

* Peter Griffin visited Shenzhen as a guest of Huawei.

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