US reporter goes inside the House of Huawei

AllAfrica

4 days ago

'As a military man I have known many clever and truly outstanding strategists. I have rarely come across an individual more strategically oriented than Ren.'
With this quote from Admiral William A. Owens, former vice-chairman of the US Joint Chiefs of Staff and former CEO of Nortel, Eva Dou introduces her detailed account of Chinese entrepreneur Ren Zhengfei and Huawei, the company that he founded and has led to global prominence.
A technology reporter for the Washington Post, Dou provides the background to questions such as: How did Huawei get so big so quickly?
What relationship does Ren have with the Chinese military?
Is Huawei spying for the Chinese Communist Party?
House of Huawei: The Secret History of China's Most Powerful Company (Portfolio / Penguin, 2025, 406 pages) takes the reader through Ren's early life, his years in the military, Huawei's origins in the Shenzhen Special Economic Zone established under the rule of Deng Xiaoping, Ren's political education and how he has used it to advance the company's interests, Huawei's rise to the top of the global telecommunications equipment market, the US government's attempt to shut it down and the start of its recovery.
The story begins with the arrest of Ren's daughter and Huawei CFO Meng Wangzhou (Sabrina Meng) by Canadian authorities at Vancouver International Airport in December 2018 and concludes with her release in September 2021 and the company's subsequent development under sanctions. The timeline of events at the end of the book stops with the launch of Huawei's Mate 60 Pro 5G smartphone in September 2023.
Focused on corporate structure, management and the question of just what sort of company Huawei is (and needing to stop somewhere), Dou does not address the evolution of Huawei into a diversified technology company that is far more sophisticated and influential than it was when the Bureau of Industry and Security (BIS) of the U.S. Department of Commerce put sanctions on it in May 2019.
Born in 1944, Ren grew up in poverty in the early years of the People's Republic of China, during the struggle to establish a communist society, on the edge of starvation during the Great Leap Forward, in the dangerous political chaos of the Cultural Revolution. The son of an educator who was attacked and humiliated by students during the rampage of the Red Guards, and of a mother who supported his love of learning, he was the only one of seven children to attend university.
In 1968, after graduating from the Chongqing Institute of Architecture and Engineering with a degree in heating, gas supply and ventilation engineering, Ren went to work at Base 011, a military factory hidden in the caves of Guizhou Province, not far from Vietnam. He worked as a cook, a plumber and a technician, studying electronics in his spare time.
After that, he was dispatched to train at the Xi'an Instruments Factory, which made pressure gauges, thermometers and other devices, and then to Liaoyang in the far northeast with the PLA Engineering Corps to build a nylon and polyester factory. Ren was not a soldier, but he adopted military attitudes and a strong sense of patriotism.
'He would inculcate Huawei with a military-esque culture,' writes Dou, 'running new hires through army-inspired boot camps and emphasizing discipline and personal sacrifice. He peppered his speeches with military analogies and references to famous battles. Years later, he still carried himself with a soldier's bearing.'
In Liaoyang, Ren's unit was assigned to test and calibrate instruments brought by French technical advisors. These included differential pressure transmitters, which measure the rate of flow through a pipe. Frustrated by the old and inaccurate Soviet gauges on hand and inspired after learning about a new type of precision gauge made in the US, he decided to build his own. In 1979, after a great deal of work, he published a small book about his invention entitled A Floating Ball-Precision Pressure Generator – Air Pressure Balance.
By then, Ren had been sent to Jinan, where he was made deputy director of a research institute. And he had attended China's first National Science Conference, where Deng Xiaoping declared that scientists were part of the working class. This made it possible for him to join the Communist Party, which would greatly facilitate his career in China but raise the incurable suspicion of the Americans.
And so it was that after the PLA Engineering Corps was disbanded in 1982, Ren was able to move to Shenzhen with the experience, drive and connections that would first land him a job at a subsidiary of the South Sea Oil Corporation and then, when Shenzhen legalized privately owned technology companies, strike out on his own. In September 1987, at the age of 42, Ren founded Huawei Technologies Co.
Huawei started off as a contract assembler and distributor of telephone switches, but Ren wanted to build his own. To do this, he recruited engineering talent and began to copy a Chinese-made switch, a simple PBX (Private Branch Exchange), that was already on the market.
The engineers he hired included Guo Ping, who is now chairman of Huawei's supervisory board, who joined Huawei in 1988; and Hu Houkun (Ken Hu), who is now one of the four rotating chairs of the company's board of directors, who joined in 1990. Two other current rotating chairs, Xu Zhijun (Eric Xu) and Liang Hua (Howard Liang), joined in 1993 and 1995. The fourth is Ren's daughter, Meng Wanzhou.
In 1993, Ren bet the company on the development of an advanced digital PBX that could handle 10,000 telephone calls at once. The following year, having obtained the support of the Ministry of Posts and Telecommunications and formed a joint venture with provincial telecommunications bureaus, Huawei had both a functioning prototype and recognition as a company that could help China eliminate its dependence on foreign suppliers of telecom equipment.
When national leader Jiang Zemin, himself an engineer, visited Shenzhen, Ren told him:'A country without its own program-controlled switches is like one without an army.' Ren added that such switches are 'related to national security' and that their 'software must be held in the hands of the Chinese government.'
After that, Huawei's domestic business took off as it and Chinese rivals, led by ZTE, displaced foreign suppliers such as Northern Telecom (Nortel), Ericsson and Fujitsu with a combination of low prices, aggressive marketing, government favoritism and steady technological advance. Foreign equipment was ripped out and replaced, something that Huawei itself would experience in the US and other countries many years later.
Huawei also began to expand outside China, starting in California in 1993 and moving on to Hong Kong, Russia, Europe, Latin America and the rest of the world. Faced with entrenched competition in advanced countries, it sought an advantage in less attractive markets including Iraq, Afghanistan and Iran. That earned it the attention of the US military (which bombed an optical fiber network Huawei was building in Iraq in 2001) and the National Security Agency (NSA).
In February 2003, Cisco sued Huawei for patent infringement, dropping its suit in July 2004. Neither side revealed the details of the settlement, merely indicating that they were satisfied, but suspicion of Huawei only increased. The FBI interviewed Ren during his visit to New York in 2007, Motorola sued Huawei in 2010 and the House Select Committee on Intelligence looked into the activities of both Huawei and ZTE in 2012.
In 2014, the New York Times and Der Spiegel, citing documents made public by Edward Snowden, reported that the NSA had hacked Huawei's email system in 2009, had also gained access to its source code and was even using Huawei telecom infrastructure to conduct its own spying operations.
Also in 2014, Meng Wanzhou was detained for questioning at JFK Airport in New York. In 2016, the U.S. Department of Commerce put sanctions on ZTE, and in August 2018, President Trump prohibited US government agencies from using ZTE and Huawei equipment. When Meng Wanzhou was arrested in Vancouver in December of that year, the immediate pretext was Huawei's business in Iran, which contravened US sanctions.
But there was a lot more to it than that. Huawei had become the world's top supplier of leading edge 5G mobile telecom equipment, with the highest market share, the most advanced technology and by far the lowest prices. Western vendors, who had invented and until recently dominated the telecom equipment market, were going the way of the Dodo bird.
On top of that, the US, Australia and others were worried that China would do to them what the US had been doing to China, with serious consequences for national security. As former Australian Prime Minister Malcolm Turnbull wrote about banning Huawei's 5G equipment, 'That didn't mean we thought Huawei was currently being used to interfere with our telecommunication networks. Our approach was a hedge against a future threat, not the identification of a smoking gun but a loaded one.'
As things stand now, the use of Huawei and ZTE 5G equipment has been banned or greatly restricted in the US and Canada, western Europe, Japan, South Korea, Australia and New Zealand. But because countries not allied with the US have not cooperated, and because the Chinese market is so big, Huawei remains the world's top supplier.
Near the end of her narrative, Dou writes:
But make no mistake: The US government has succeeded in halting Huawei's rise. Huawei is no longer setting new sales records each year but is instead working to regain its 2020 levels…[and] it remains to be seen if Huawei can maintain its place as an R&D leader in the next generation, and the one after that.
However, Huawei's financial results for 2024 show sales up 35% since 2021, when sanctions hit hardest, reaching 96% of their 2020 peak with a higher operating margin. And, in addition to returning to the 5G cell phone market in defiance of US sanctions on the Chinese semiconductor industry, Huawei has taken the lead in 5G-Advanced (5.5G) mobile telecom technology, replaced Oracle's ERP (Enterprise Resource Planning) software with its own, become a significant supplier of autonomous driving solutions, and impressed both Nvidia CEO Jensen Huang and industry analysts with its AI processing technology.
Speaking in Beijing last Wednesday, Huang said, 'Anyone who discounts Huawei and anyone who discounts China's manufacturing capability is deeply naïve.' But that doesn't mean that Dou's conclusion is necessarily wrong, only that a book cannot keep up with the news, particularly in the case of fast-moving technologies.
What the news can't match is Dou's thorough exploration of the evolution of Huawei's management, its legal and political battles in China and the US, and the character of Ren Zhengfei and its other key personnel. House of Huawei is an excellent source for scholars, journalists and anyone else interested in the rise of China.
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