Huawei founder brushes off accusations that it acts as an arm of the Chinese state
Ren Zhengfei tells James Ashton why he is suspicious of the stock market, saying that ‘shareholders are greedy’
Ren Zhengfei wants to make one thing clear. The reason it has taken the founder of the controversial Chinese telecoms equipment maker Huawei so long to give his first interview in Britain is not that he is secretive, just shy.
"Some people have been saying that my reluctance to meet with the media has been used as a reason to label Huawei as a mysterious company,” he said through an interpreter. “I think that it is more of a personality issue. However, I have been trying to become more open, including to friends in the media, so you know what type of person I am and that may help to unveil … the last of the mystery about Huawei.”
And what mystery it has been. Huawei, a crucial contributor to the 4G revolution, has grown ferociously in the last few decades. Suspicions that it acts as an arm of the Chinese state, passing information back to Beijing, has been vigorously denied – and has not inhibited progress.
In Britain, where Huawei’s kit is already installed at the heart of our phone networks, the company is in the middle of a five-year, £1.3bn spending programme that has seen it put a headquarters into Reading with a state-of-the art research centre to follow. George Osborne sees the relationship as a bridgehead to lure more Chinese investment to Britain. The Government’s welcome is in stark contrast to how Huawei – which roughly translates as “achievement for China” – is still viewed in America, however.
His supporters would dearly love to paint Mr Ren, who founded the business with a few thousand pounds 27 years ago, as an entrepreneur more like Jack Ma, the technology entrepreneur behind Alibaba, than a military mastermind.
What has helped Mr Ren’s cause has been leaks from former US security contractor Edward Snowden suggesting that America’s National Security Agency had accessed its servers and monitored Huawei bosses’ communications.
The irony is that the equipment supplier has made little headway in selling its kit into the US after it became the target of congressional hearings and was accused of acting as a conduit for Chinese espionage.
When quizzed on whether someone was listening into his phone calls, Mr Ren said: “That’s something within my expectations.” He added: “From our point of view, there is nothing secret in the things that I would be talking about.”
Mr Ren said he had no knowledge of the surveillance in the past – but “I would have guessed someone would have been interested in this stuff”. He described his role in Huawei as at the “thinking level”, so “all my thoughts I need to share with the others sooner or later”.
He doesn’t expect the Snowden leaks to halt Huawei’s breakneck growth, forecasting that revenues could double in five years, to as much as $80bn (£47bn) by 2018. Most of its turnover today comes from telecoms kit, where it rivals Swedish giant Ericsson and dwarfs Nokia and Alcatel-Lucent.
Huawei is also the number three smartphone maker behind Apple and Samsung, but their huge profits are “beyond our imagination”, he said. The division’s improved performance has given him hope for the future “but we should not be blinded by that hope”.
Mr Ren was a member of the People’s Liberation Army, serving in the engineering corps until 1982, when China made huge military cuts. He struggled with the transition to corporate life. “Instinctively I felt that the market economy was about cheating,” he said, after he was cheated by others and didn’t have the money for litigation. “In the army you never talk about money; you only talk about how you can serve the people better.”
He is still suspicious of the stock market, and will resist calls for Huawei – which is owned by thousands of its staff, with Mr Ren holding just 1.4 per cent – to go public
“In reality, shareholders are greedy,” he said. “They want to squeeze every bit out of the company as soon as possible.”
Being staff-owned is “part of the reason why Huawei could catch up and overtake some of our peers in our industry”. The staff scheme that lets workers buy stock will be extended to all key non-Chinese people by the end of this year. Could Huawei list in the future, though? “The company would also possibly become greedy but now we can suppress that greed for a certain period of time. But I cannot assure we can suppress that kind of greed forever. I can’t live forever and my promise can’t hold forever.”
Huawei has made strides to internationalise, with 40,000 non-Chinese staff in a total workforce of 150,000 and a “majority of our top-notch scientists coming from the West”.
A UK parliamentary report last year found that Huawei was allowed to embed itself in Britain’s telecoms system without proper security checks – but failed to find evidence of unauthorised snooping.
The company produces the building blocks of the internet and mobile communications – base stations, broadband connections boxes, routers, data-storage units and mobile-phone handsets. Its management structure is like no other, having three rotating chief executives alongside Mr Ren. He is reluctant for just a single leader to take over when it is time for him to step back, asking what Huawei can learn from Britain’s monarchy.
He also has plenty to say about America, where “we keenly look forward to opportunities to provide our services and goods”.
Mr Ren invokes the heroes of the 9/11 terror attacks to explain his appreciation of America’s greatness. But had he been born in China, Apple’s late co-founder, Steve Jobs, would have not been so successful, he said.
“It would have been very tough for him even to survive,” he explained, because of Jobs’ tendency to stand out from the crowd.
What about Mr Ren’s very own White House, which a building at his headquarters in Shenzhen, southern China, is said to be modelled on?
“That is just a small entrance,” Mr Ren said, looking puzzled. “And the colour is yellow, not white.”
Never mind the company, what about the man?
Married with three children, Mr Ren, 69, said he felt like “a student at a primary school taking a test” as he was quizzed about himself. Smartly dressed, with red tie, blue shirt and neatly parted dark hair, he added: “When I was a kid, my family was quite poor. As a result, apart from doing the homework I didn’t have the opportunity to build a hobby for myself. I don’t even know how to drink and how to smoke. Overall, my personal life is not that colourful.”
His colleague leans in to suggest that Mr Ren is “very interested in reading and enjoying tea”, especially “British afternoon tea”. His biggest regret is not fulfilling his feudal responsibilities to his parents. “When I realised I had to do so, my parents were already gone.” The family is connected to the business, though. His daughter is Huawei’s finance director.
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