Last week, The Economist featured an article about global technology leader Huawei - The long march of the invisible Mr. Ren (linked). All-in-all, it wasn't an imbalanced piece. It did, however, inspire some thoughtful clarifications, as follow (full disclosure, again, I work for Huawei):
Ours is truly a globalized economy and Huawei is the proof.
Born in the free-market Special Economic Zone of Shenzhen, Huawei epitomizes the Chinese version of the American dream: A start-up made big, owned by its employees, exploding across the global stage to lead markets and technological innovation. Indeed, Huawei, which blends its Chinese roots and local innovative and work-force advantages with the skills of the best-and-brightest recruited locally in markets worldwide, should be celebrated as a poster child for the global digital economy. And yet, as The Economist reports, there are indeed a handful of politicians in Washington who might well instead describe the company as somehow sinister and subsidized and linked to hostile forces. All of which is hogwash.
That Mr. Ren, Huawei’s Founder and President, does not have a history of doing media interviews is hardly grounds for suspicion, other than perhaps that he’s developed a pretty solid understanding of how the media works when it comes to Huawei. Nor is his over-a-quarter-century-old military service relevant in any way to his 20-plus year leadership of Huawei, or even unusual in the company of his global corporate peers. Indeed, if Mr. Ren weren’t Chinese – if Huawei did not have a Chinese heritage – we’d all likely have been spared years of undue media- and government-inspired Huawei-related FUD, particularly in the U.S. But, Huawei cannot change its roots in China any more than it can resolve the tensions between the U.S. and Chinese Governments which seem to be holding hostage Huawei’s further success in the U.S. marketplace.
To the extent that Huawei’s February 2011 Open Letter may not have offered sufficient fact-based clarification, particularly in the area of financing as indicated by The Economist, consider the following:
Huawei's financing – which is regularly mis-referenced as related to some sort of preferential government treatment - is mainly in the form of loans from commercial banks to meet Huawei’s capital structure and business planning requirements. Huawei’s approach is one of diversification: Huawei collaborates with 28 banks: 10 China-based, 18 non-China-based. In total, these banks have granted $25 billion in credit facilities to Huawei according to going market rates and practices. Huawei has utilized $3.58 billion of those credits, $1.88 billion from non-China-based banks, $1.70 billion from China-based banks.
Also regularly mis-understood are so-called “China Development Bank (CDB) lines of credit to Huawei.” The facts are that the CDB and Huawei have signed MOUs under which the CDB has indicated a willingness to provide export credits to potential Huawei customers. These MOUs are not lines of credit because the funds are not actually committed. Indeed, while one five-year MOU was signed in 2004 referencing $10 billion, and another in 2009 referencing $30 billion, since 2005 a total of only 35 projects have tapped the CDB export credits and only $2.99 billion have actually been extended to Huawei customers. Meanwhile, Huawei’s global sales over the same period exceeded $110 billion.
These are facts. So too are the significant contributions Huawei makes to American innovation and livelihoods. For example, in order to fuel Huawei’s global supply chain, in 2010 alone Huawei purchased more than $6.1 billion from major U.S. technology companies, indirectly sustaining over 30,000 U.S. jobs in addition to the 1,100 U.S.-based workers Huawei employs directly. Beyond that, each year, Huawei invests about 20% of its North American revenues into local R&D, totaling $135 million in 2010 alone. Yet further, Huawei is committed to university partnerships to foster the next generation of American telecommunications experts, investing more than $10 million in 2010 to support programs at Georgia Tech, Harvard, MIT, Stanford, UC Berkeley, UC Irvine, UCLA, UC San Diego, UT Austin, UT Dallas, Washington University and Yale University.
Huawei is no more mysterious than Mr. Ren is "invisible." Perhaps it is time to focus on the facts. In which spirit, I would add one more: In a market where an effective infrastructure vender duopoly exists, where there is no competitive incentive for the duopolists to innovate or rationalize their pricing, using non-commercial geo-politically-inspired shadowy “national security” excuses to lock out an innovative global technology leader with a history of competitive market-based pricing does a remarkable disservice to capital-sensitive local telecommunications carriers and each-and-every individual American consumer who very much wants to benefit from the affordable ubiquitous broadband services he/she deserves and has been promised.
You got some other "facts?" Then put up, or shut up. Enough already.
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