Huawei founder and CEO Ren Zhengfei defies U.S. pressure as Western nations rethink security threat allegedly posed by China-based company
As the United Kingdom and Germany expressed reservations about the security threat posed by Huawei, reclusive CEO and founder Ren Zhengfei gave a rare interview in which he defied American pressure and said there is “no way the U.S. can crush us.”
The Lowdown: Huawei is under intense pressure by the United States, which alleges the China-based company’s telecommunications and data networking equipment poses a serious security threat. Several Western and Western-oriented countries, including Australia and
Ren, who hasn’t spoken directly with journalists in four years, objects to what he calls “politically motivated” actions led by American authorities. He said the market needs Huawei, which offers superior technology at competitive prices. Critics of the Huawei sales bans often say the same thing.
The Details: A European Union ban of Huawei equipment sales would put a significant pinch on the company, which is a market leader or contender in many European countries. While the
The Impact: The implications for Huawei suffering further market restrictions are huge. A Huawei ban in Europe could set back the development of 5G networks and related technologies — such as Internet of Things — for as much as three years. The telecom industry association, GSMA, will hold talks at the Mobile World Congress in Barcelona to review the potential impact of a EU Huawei ban.
For Huawei competitors, though, expansion of market restrictions is good news. In the U.S., the existing ban gives Ericsson and Nokia nearly exclusive rights to 5G network development. The Huawei troubles embolden Samsung to step up its efforts to develop and market networking equipment.
Background: For several years, the United States has led a campaign to restrict the sale of products from Huawei and ZTE, another China-based telecommunications network equipment manufacturer. The U.S. House Intelligence Committee issued a report in 2012 labeling Huawei a national security threat.
In December 2018, Canadian authorities arrested Ren’s daughter and Huawei CFO, Meng Wanzhou, on charges that she helped the company evade U.S. trade restrictions on the sale of technology products to Iran. Meng remains in Canadian custody awaiting extradition to the U.S.
The Buzz: “There’s no way the U.S. can crush us,” said Ren in a group interview with foreign journalists. “The world needs us because we are more advanced. Even if they persuade more companies not to use us, we could just scale things down a bit.”