Huawei founder Ren Zhengfei says he does not expect big impact from 5G pushback

19-Jan-2019 Intellasia | South China Morning Post | 6:00 AM Print This Post

The walls appear to be closing in on Huawei Technologies in the US, Europe and elsewhere, but founder Ren Zhengfei said he is not too worried.

Speaking to reporters for a second time this week, the 74-year-old said that Huawei has anticipated the growing suspicions over the security of its telecommunication network equipment.

“We have anticipated more than a decade ago that we may face such problems as we are seeing today and been preparing for it,” he said in a briefing at the company’s Shenzhen headquarters on Thursday. “These problems will affect us, but the impact won’t be very big and there won’t be a major problem.”

Ren rarely gives interviews and his second meeting with reporters this week is part of a public-relations campaign to reassure the company’s 180,000 employees and customers to “project confidence, promote understanding and trust in Huawei”.

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Huawei is facing growing pressure from Western countries, particularly the US, where some politicians consider it an arm of the Chinese government. Pressure has been mounting on Huawei as the company’s chief financial officer, Meng Wanzhou, faces a potential extradition to the US from Canada on fraud charges.

Countries including Britain, Germany, Australia, New Zealand and Canada have either banned or are reviewing whether to allow Huawei equipment for their telecommunication networks.

But Ren said he is not worried because the alternative to buying from Huawei is to build very expensive networks.

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“In the West, where villas are scattered, people need to buy our equipment if they want to watch 8K TVs or do anything requiring a fast internet connection,” Ren said, according to a transcript of the briefing with mainland media. “We have confidence that our products are much better than the competition’s … and (customers) have every reason to buy ours.”

Ren also described the antagonism toward Huawei in the US as noise made by a minority of politicians, and not representative of the broader American society. Praising Donald Trump as a “great president” in an earlier interview, Ren explained on Thursday that Trump’s tax cut could boost industrial development and give the US an edge for “a hundred years”. But the US economy could also decline precipitously if Trump continues to pick fights and threatens countries, scaring off investors, he said.

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On his daughter, Meng Wanzhou, Ren said the two of them were supposed to attend the same meeting in Argentina and that she had set off two days earlier with a transit in Canada before her arrest. The case will be settled through the legal procedure, he said.

“My daughter and I just make some phones calls (to stay in touch),” he said. “Over the phone, we just make some jokes. Wanzhou is also very strong.”

Ren, the son of schoolteachers and a survivor of China’s great famine between 1958 and 1961, established Huawei with a capital of 21,000 yuan in 1987. He expects the annual revenue for the privately-held company to be around $125 billion this year, which is based on an estimate of slower growth rate of “no more than 20 per cent”.

The company is investing $15 billion to $20 billion on research and development this year and will make significant investment on R&D, building “the best network in the world” in the next five years, according to Ren.

“In another five years, our annual sales could be more than twice of the size of the sales today,” he said.

In response to a reporter’s question on a possible tech race between China and the US, Ren called on China to place more emphasis on education as he foresees a revolution in production in the next 20 to 30 years.

“The work that can be done solely by artificial intelligence is likely to go back to the West…The work cannot be done by AI is likely to move to countries with low labour cost in East Asia, Latin America or South Europe. Our country is facing the same trend,” he said.

“If we invest in education, poor kids (in rural China) will have the chance to become PhDs and bring an even more prosperous future for China.”


Category: China

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