Huawei founder gives first ever interview

TOM PULLAR-STRECKER
Last updated 15:17 09/05/2013
Ren Zhengfei
OPENS UP: Huawei Chief Executive Ren Zhengfei (pictured last year) has given his first media interview.

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The founder and president of Chinese technology giant Huawei, Ren Zhengfei, has used a visit to New Zealand to speak to the media for the first time in his career.

Ren, 68, had never previously consented to media interviews inside or outside of China, but this morning fielded questions from a handful of journalists at Wellington's Museum Hotel on topics ranging from his personal view of China's human rights record to a rumour he will soon retire.

Responding to speculation about Huawei's relations with the Chinese government, he said they were no different to those that might exist between a New Zealand firm and the New Zealand government.

His visit follows a trade trip to China by Prime Minister John Key and a large entourage last month to celebrate the fifth anniversary of the countries' free-trade agreement, during which relations between the governments appeared to hit a new high.

Speaking through a translator, Ren said he appreciated the opportunities New Zealand carriers and the New Zealand government had given the company.

He said he had also met Labour Party leader David Shearer and Communications Minister Amy Adams.

Huawei is the world's second largest telecommunications equipment manufacturer after Sweden's Ericsson and the third largest manufacturer of smartphones after Apple and Samsung. It turned over US$35 billion ($42 billion) last year and employs more than 144,000 staff, between 30,000 and 40,000 of whom Zhengfei said were now non-Chinese nationals.

The company earned two-thirds of its revenues outside of China last year, but has been largely shut out of the United States market because of distrust.

In October, the US Congress intelligence committee advised US companies not to buy from Huawei if they cared about intellectual property, customers' privacy or the national security of the US.

The Australian government banned Huawei from supplying equipment for its National Broadband Network a year ago, reportedly in retaliation for hacking attempts blamed on Chinese interests.

Huawei, which is a major supplier to 2degrees, Vodafone and Chorus in New Zealand, has denied any wrongdoing.

Ren suggested "jealousy" might be a factor behind the US disapproval. As Huawei did not supply any key telecommunications equipment to US carriers or any equipment to the US government, it could not be responsible for any security issues there, he said.

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Asked whether, if Chinese security agencies approached any of Huawei's staff and asked them to spy on a foreign entity on their behalf, he could be confident all the company's staff would be in a position to refuse, he put his hand up, smiled and responded "no".

The company clarified the response was intended to mean that he was confident all his staff would refuse any such request, saying the question had got mixed up in translation.

Ren joined the Communist Party in 1978 and was an engineer in the People's Liberation Army, prior to founding Huawei in Shenzhen in 1987.

He joined the party at a time when it was expected all "exceptional people" would do so, he said. "Back in 1978 it was not yet the time for China to open itself up to the outside world.

"At that time my personal belief was to work hard, dedicate myself or even sacrifice myself for the benefit of 'the people'. Joining the Communist Party was in line with that aspiration."

Ren said the human rights situation in China had been improving "step by step continuously".

"I think the situation in that area today is very different from what we saw 30 years ago. Of course, since the western world has gone through several hundred years advancing human rights, in their standards there is still big potential and room for China to further improve the human rights situation.

"However, for people like myself who went through the cultural revolution and all those complicated times, I think China has gone through tremendous progress. Without such progress there would be no possibility for me to sit here today and talk with all of you," he said, adding: "I believe the future will become better than today".

Asked whether he believed labour rights were sufficiently protected in China, he said the country had to take a "developmental perspective" when looking at that issue.

"Excessive protection of labour rights may drag China down into some of the difficulties that we are seeing in Europe."

China had to avoid creating a European-style "welfare society", he said.

Huawei has responded to the suspicions levelled against it by making tentative efforts to open up and become more transparent. Those efforts appear to be accelerating.

In January, chief financial officer Cathy Meng, who is Ren's daughter, discussed the company's financial performance with journalists in China for the first time.

But Ren's media aversion appeared something that Huawei's critics could count on to count against the company, until this morning. The New York Times last month described him as "highly secretive".

He has made two previous public appearances outside China, both last year, delivering speeches at a European Union Competition Forum in Brussels and at a conference in St Petersburg.

Ren, who owns 1.42 per cent of employee-owned Huawei, has left it until late in his career to meet the media, with speculation he may soon retire as company president.

He played down the succession issue, saying Huawei's three rotating chief executives managed the day-to-day business of the company. When he would step down would depend on when the company considered it could do without him, he said.

Looking relaxed at the end of the 90-minute media briefing, he joked that he would open a bottle of champagne when that time came.

"My life aspiration is to open a coffee shop, or maybe a restaurant, and then have a farm of my own." These he would be able to run with more autonomy than he did Huawei, he said.  

Huawei signalled last year that it aimed to triple its revenues to US$100b by 2022 by expanding into the information technology services market, for example by providing infrastructure for cloud computing. That might bring it into new competition with US multinationals such as IBM and Hewlett-Packard.

Ren said Huawei might turn over US$40b this year and US$70b by 2017. Huawei would concentrate on evolving its internal structure during the next five to 10 years, rather than contemplate a public listing, he said.  

 

Until now, Huawei had been very much centrally controlled, he said.

"The future model is to give the biggest say to our local teams who are closest to our customers and empower them so they have flexibility in interactions with customers. The headquarters or corporate functions will change into a more supporting and service function.

"We think that is going to be a very challenging transition and we are prepared to spend the next five to 10 years to complete it."

- BusinessDay.co.nz

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