Thread: Huawei: Will China conquer the world?

But Huawei has one problem as it pushes ahead as China’s first home-grown, non-state-owned multinational success story: A lot of very powerful people don’t trust it.

There is another very good reason to remain quiet and humble in the face of angry rivals: The company’s near-invisible founder and current CEO, Ren Zhengfei, was an engineer in the People’s Liberation Army (PLA). He started Huawei after he was downsized out of his job. This fact makes Western governments, particularly those of the United States and Canada, very nervous. In response, all the company can do is grimly explain, over and over again, that Huawei is not a proxy for the Chinese government. It does receive research grants from Beijing, it’s true, but they amounted to a drop in the bucket—$68.9 million—in 2010.

Political opposition to Huawei in the U.S. has already derailed an acquisition attempt (of 3Com) and spoiled a potentially huge contract (with Sprint Nextel, which has some government contracts). Since growth in the world’s most valuable wireless market is a top priority for Huawei, overcoming the Republican Party’s national security paranoia—which has fused with anxiety over the state of American competitiveness—may be the biggest challenge it faces. If Huawei were ever in a position where a major stateside buyout was absolutely crucial, it could very well be stuck.

Of course, it doesn’t help that Huawei is growing in lockstep with cyber-crime perpetrated from Chinese IP addresses. And Western paranoia feeds Eastern paranoia. Huawei scaled back scheduled interviews in China for this article after the Canadian Security Intelligence Service renewed its investigation of the company back in Canada—an investigation that included the physical examination of some of Huawei’s installed wireless network equipment in Toronto, according to a wireless industry executive with direct knowledge of the incident. The investigation stemmed from complaints by Canadian pharmaceutical companies about China-based hacking and attempted thefts of generic drug formulas; there was worry that having Chinese network equipment in Canada could compound the problem.

Huawei faces even more suspicions in India. Judging by conversations with senior telecommunications officials and political leaders, it is almost taken for granted that Huawei is an arm of the PLA. As in the U.S., officials may just be voicing frustration at their country’s own lack of homegrown telecom innovation, and keeping out potentially disruptive companies by playing the national security card. But more than one report to the U.S. Congress has flagged Huawei’s links to the Chinese military. A particularly damaging report by the RAND think tank in 2005 said Huawei “maintains deep ties with the Chinese military, which serves a multifaceted role as an important customer, as well as Huawei’s political patron and research and development partner.” In 2010, the U.S. National Security Agency reportedly called AT&T and warned it away from awarding Huawei contracts worth hundreds of millions of dollars—unless, of course, AT&T wanted to endanger its contracts with the U.S. government.

Remember this when it was all the rage in my country a few years ago, Huawei was labelled as a national security risk. We imported the american paranoia. Front end is not a problem, backend is.

As of 2010 the US govt still won't trust them. Maybe this will change as Huawei gets more contracts and the perception improves.

Originally Posted by DOR

How many here are old enough to remember US-Japan trade tension in the 1970s and 1980s? Remember reports of people taking sledge hammers to imported cars, simply because the Japanese automakers built cars that were popular?

Japanese cars only sell well on the twin coasts. Go to small towns in the heartland and they still only buy american. This is my anecdotal observation from what friends told me when they visited OK & TX.

Anything to do with China is politicised so forget any objectivity and think the nature of the opposition to Japanese products was different.

eg. when were Japanese products ever considered a national security risk ?