Michael Schuman/The Atlantic
One of Beijing’s top goals is transforming China into a technology powerhouse, so what happens to Huawei matters beyond China’s own borders.
As Ken Hu, the “rotating” chairman at Huawei Technologies, made the case during a briefing in southern China that his company’s telecom equipment was trustworthy and above board, he did something mundane for many global executives, yet remarkable for the embattled Chinese giant: He took questions from foreign journalists.
Hu’s press conference on Tuesday was an all-too-rare attempt by Huawei’s top brass to engage with the world—and it comes at a critical moment. This month, Hu’s colleague and the company’s chief financial officer, Meng Wanzhou, was arrested in Canada, accused by Washington of misleading financial institutions to break U.S. sanctions on Iran. Meng’s arrest is the latest front in a multipronged standoff between Washington and Beijing, one that encompasses disputes over trade, intellectual property, naval lanes, and much else.In that broader context, focusing on Huawei may appear, at first glance, to be a narrow lens. After all, the company makes telecom gear that its critics can buy elsewhere. But what happens to Huawei matters—for China and the world. One of Beijing’s top goals is transforming China into a technology powerhouse able to innovate and control the vital know-how powering future industries, and to free itself from, and then challenge, the United States. Huawei, as one of China’s most prominent global enterprises, will be a key part of that quest. Hence, its problems are China’s problems, and the fate of the company could foreshadow the fate of the country.Huawei has always insisted that it has never had ties to the Chinese government or military. Still, its critics remain unconvinced. The suspicion that Huawei is a threat to American national security has become—fairly or not—indelibly marked on the minds of many American officials. Sales of its major equipment in the United States have been stymied, its acquisitions of American assets have been blocked, and President Donald Trump’s administration, determined to defend American technology, has taken an especially hostile position on the company.
All of that, to a degree, is Huawei’s own fault. The problem starts with its mysterious corporate culture, which has left policy makers and security experts hazy about its background and intentions.
Huawei markets itself as a miracle of modern entrepreneurship, a rags-to-riches fairy tale of a regular guy who launched a business empire on hard work and chutzpah. In the company’s narrative, its founder, Ren Zhengfei, was a mere soldier-engineer who, after leaving the military, started Huawei in 1987 with no government connections, state aid, personal wealth, or experience in telecommunications. Somehow, despite this lack of expertise and resources, Ren managed to bring a complex technical system to market in a mere handful of years, an impressive achievement in what was then a decidedly low-tech China. Officially, the company is owned by its employees, who vote in their own management team. Ren, whom the company calls its “natural person shareholder,” controls only 1.4 percent of Huawei but has served as its chief executive for 30 years, and his daughter, the arrested Meng, now helps him run the company.This story could be perfectly true. But Ren has done a miserable job of selling it. As Huawei has risen to worldwide fame, he remains an enigma. Rarely appearing in public, he has made little effort to refute his critics or build confidence in himself and his company. Though other Huawei executives reach out to an international audience here and there—as Hu did on Tuesday—Ren mostly delegates the talking to lobbyists and public-relations officers.