The What, The Why & The How Of Huawei

China’s mega hi-tech firm is made in the country’s image

Huawei literally means ‘China is great’. House of Huawei: The Secret History of China’s Most Powerful Company by Eva Dou tells the story of the blazingly successful high-tech firm that got into the West’s crosshairs. US-China trade war exploded into full-scale hostage diplomacy, as CFO Meng Wangzhou, daughter of founder Ren Zhengfei, was arrested in 2018 in Canada.

It has been accused of helping the Chinese govt spy, a charge Huawei has always denied. It has also been accused of economic espionage, of covertly selling embargoed equipment to Iran, and of helping China crack down on its Uyghur minorities. Just as Soviets’ Sputnik moment had once freaked out US, Huawei became the focus for all that seemed threatening about China.

As it grew around the world building phone and internet networks, Huawei was scooping up engineering talent, filing more patent applications than any other company. It was No.1 in 5G and smartphones, breaking new ground in AI. Its annual sales exceeded Disney and Nike combined, and it employed more people than Apple. How did this corporate juggernaut come to be, under a stodgy communist regime?

In the early 80s, Ren came to Shenzhen, China’s first special economic zone. Huawei began with assembling and selling telephone switches and fire alarms. By 1993, Huawei was aiming to build a digital switch that could handle 10,000 calls at once. Until 1997, it was a ‘collectively owned enterprise’, neither public nor private, with ‘democratic management’ by workers – which opened up more financing options in China.

Reading the political direction was clearly important. Ren established ties with Communist Party general secretary Jiang Zemin, declaring that a country without its own program-controlled switches was like one without an army. It partnered with local govts, these joint ventures bringing money and permissions. Even as Beijing offered encouragement, Chinese authorities also leaned on Huawei for surveillance and call tracing. Huawei upped its national and international sales game. Profit was not its sole goal.

Huawei got its first overseas project partnering with Hutchinson. It started making video cameras for conference calls and closed-circuit surveillance. By end 2012, it was the world’s top telecom vendor. Its foray into the West was dogged by suspicion, which made it pivot into consumer electronics.

When grilled by American lawmakers, Huawei insisted it had followed local laws of every country it operated in. Following US lead, the principle followed by Huawei was not ‘innocent until proven guilty’ but ‘better safe than sorry’, given the geopolitical situation.

Meanwhile, the Edward Snowden whistleblower report exploded, showing that US was doing exactly what it accused China of, and what Cisco was doing was no different from what Huawei was accused of.

While Meng was eventually released, Huawei continued to be under siege, floundering in the face of Trump’s trade wars. It sold off its undersea cable business, and its Honor smartphone line, struggling to survive.

Today, the new cold war is a reality, and Huawei’s global rise has been halted. It has survived Washington’s offensives by developing alternatives to US tech it had relied on. It remains committed to long-term survival, not profit maximisation, the book says. It stresses collective buy-in from workers, but cares less about individual well-being. Huawei, the company, is made in the image of its country China, for better and for worse.

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