Founder Ren Zhengfei says Huawei ‘racing to develop’ new technologies amid coronavirus pandemic

Iris Deng

While the coronavirus pandemic may have forced many companies in China and around the world to hit the pause button on business operations, engineers at Huawei Technologies have been working round the clock to combat the crisis.

The world’s largest telecommunications equipment supplier and China’s biggest smartphone maker has been motivated by a sense of mission, said Ren Zhengfei, founder and chief executive of Huawei, as he sat down for an interview with the South China Morning Post this week.

“Over 20,000 scientists, experts and engineers worked overtime during the Lunar New Year holiday, because we’re racing to develop new [technologies],” Ren said, referring to the work in progress as “something which will keep us ahead of global competition”, without revealing further details.

The company was on the front foot before the coronavirus crisis gripped China and spread around the world because of pressure from the US government on its market-leading 5G network gear business.

“The US will continue to increase sanctions on us, and we will have to complete [the new technologies] before that happens,” Ren, 75, said in a video interview from his Shenzhen office on Tuesday, the first he has given since the coronavirus outbreak shut down large parts of the world.

Huawei’s Ren welcomes staff complaints but wants to keep them internal

Aside from the US sanctions, Meng Wanzhou, Huawei’s chief financial officer and Ren’s daughter by his first marriage, is still in Canada awaiting a hearing to be extradited to the US, where she faces a bank fraud charge. Ren said he misses his elder daughter, whom he last spoke with by phone in late January during the Lunar New Year holiday. Ren is confident that “there shouldn’t be a worst-case scenario” regarding Meng’s trial.

“I believe in the openness, fairness and justice of the Canadian legal system … the US intelligence has spent over a decade to find faults on our side and came up with no evidence today, which means we have been restrained in our own behaviours,” Ren said.

In May last year, Washington added Huawei and 68 of its non-US affiliates to a trade blacklist, officially called the Entity List, accusing the company of being a threat to national security, something which Huawei has repeatedly denied.

The action restricts Huawei’s ability to buy hardware, software and services from its American hi-tech suppliers without approval from the US government. This includes Google mobile services, used on its handsets for international markets, and key components in its next-generation mobile network base stations.

While the US has since granted five licence extensions to Huawei that allowed it temporary access to American suppliers, Trump earlier this month signed legislation to bar the country’s telecoms carriers from using US subsidies to purchase network equipment from Huawei.

The Trump administration has also continued to urge its allies in Europe to ditch Huawei in their 5G mobile network development plans.

“It’s not a problem for us to survive as a company, but it’s questionable whether we can keep our leading position,” Ren said. “We won’t be able to lead the world in the next three to five years if we cannot develop our own technology.”

Huawei will step up its investment in research and development, with the 2020 budget surpassing US$20 billion, up from US$15 billion last year, according to Ren.

However, Ren also noted that a complete de-Americanisation would be “impossible” for Huawei. “US firms will also need [Huawei as a client] to survive,” Ren said, adding that no one can be spared from the situation as a result of globalisation.

Coronavirus outbreak fans flames of US-China decoupling debate

Huawei’s ambition to weather US sanctions, however, has been put under further pressure by the outbreak of Covid-19, which started to affect China in January. The viral disease has since spread around the world, forcing lockdown of communities and wreaking economic havoc.

It has morphed into a pandemic that has spread to 170 countries and regions, and as of Monday had forced more than one-fifth of the world’s population to stay in their homes.

Ren is confident that Huawei can pull through the crisis.

“Neither the US sanctions nor the pandemic had a major impact on us,” Ren said. “We believe the impact is minimal, and we can pull through it.”

Huawei has resumed more than 90 per cent of its production and development operations, Ren said, adding that the company has also kept its supply chain mostly intact by helping provide its partners with protective gear to keep production going.

Maintenance service personnel around the world have also been working to ensure that communications remain uninterrupted, Ren said. “The world needs internet service [even more] as the pandemic accelerated,” he said.

E-working and e-living in China changed forever by pandemic

Other than Hubei, the province at the epicentre of the outbreak in China, none of the company's global workforce has been infected by the coronavirus. Those who were afflicted in Hubei are now recovering, Ren said, without divulging numbers.

Although Europe, Huawei’s most lucrative market outside China, has now been gravely affected by Covid-19, Ren expects demand for its network gear there to remain strong on the back of peoples’ need for online services.

“New technologies such as tele-health, online learning and remote working have showed to the world their usefulness in preventing disease from spreading, as well as the importance of network connections,” Ren said. “Even when the West is feeling the mounting impact of the coronavirus, most of our projects can actually enhance their capabilities [during the outbreak]. There is a demand we need to meet.”

(Corrects in the sixth paragraph to say Meng faces bank fraud charge in the US)

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