Huawei CEO hits back at claims company spies for China
Ren Zhengfei says no law forces companies in China to install ‘mandatory back doors’
SHENZHEN, CHINA— The founder and CEO of Huawei Technologies Co. said his company has never spied for the Chinese government—and never would—as he made a rare public appearance following the arrest of his daughter in Canada.
“No law requires any company in China to install mandatory back doors,” Ren Zhengfei said Tuesday. “I personally would never harm the interest of my customers and me and my company would not answer to such requests.”
Mr. Ren didn’t say what specifically he would do to resist such requests. All companies doing business in China are required by law to hand over customer data to the government in cases that touch on national security. In China, national-security threats are broadly defined and can include speech critical of the Communist Party.
Speaking in Chinese through an interpreter, Mr. Ren said he missed his daughter, Huawei chief financial officer Meng Wanzhou, but was optimistic justice would prevail. Ms. Meng was arrested Dec. 1 in Vancouver at the request of U.S. authorities, which accuse her of lying about the company’s business with Iran. She denies the charges.
Huawei’s reclusive 74-yearold founder, a former army engineer, also praised U.S. President Trump as a “great president,” citing tax cuts to boost businesses. The U.S. has raised concerns about Huawei’s ties to the Chinese state and that its telecom equipment could be used by Beijing to spy. Huawei has found itself caught in the middle of a deepening trade spat between the U.S. and China that has set Washington’s sights on China’s technological rise. The U.S. has imposed tariffs on swaths of Chinese imports as it seeks to rein in China’s trade practices and reduce the U.S. trade deficit. Beijing has retaliated with tariffs of its own.
Mr. Trump has signaled a willingness to use outside developments as bargaining chips in broader trade discussions. Last year, Mr. Trump asked the Commerce Department to reverse a damaging ban on American exports to Huawei’s chief Chinese rival, ZTE Corp., amid trade discussions, saying the action was hurting the Chinese economy. Mr. Trump last month told Reuters he would intervene in Ms. Meng’s case if it meant securing a stronger trade deal, though aides warned him his options are limited, according to people familiar with the matter.
A trade war between the U.S. and China would harm the world, Mr. Ren said. “In the information society, interdependence between one another is very significant,” he said. “That interdependence is what’s driving human progress forward more rapidly.”
Mr. Ren’s public appearance comes days after the arrest of a Huawei employee in Poland who was charged with spying on the state on behalf of China. Huawei has fired the employee, Wang Weijing, and said his alleged actions have nothing to do with the company.
On Monday, a Chinese court ordered the death penalty for a Canadian national convicted of drug smuggling, the latest example of how Canada has become caught up in the battle between the U.S. and China following the detention of Ms. Meng.
The events have rocked China, set back efforts toward a Beijing-Washington trade detente and dealt a direct blow to one of the country’s most successful global corporations. With 180,000 employees, Huawei is the world’s largest maker of telecommunications equipment, where it competes with Sweden’s Ericsson AB and Finland’s Nokia Corp. in making gear like routers, switches and base stations. It overtook Apple Inc. to become the world’s No. 2 global smartphone vendor, behind Samsung Electronics Co., through the third quarter of last year.
In addition to hitting back against claims that Huawei is a national-security threat, Mr. Ren addressed the company’s unusual ownership structure. Huawei is privately held and, while critics of the company say its ownership is opaque, Huawei says it is owned solely by Mr. Ren and other Huawei employees.
Mr. Ren reiterated that the company has no outside ownership. Today, its employee shareholders number nearly 97,000, he said. “There is no external institution that owns our shares—even 1 cent,” Mr. Ren said. Huawei has been effectively locked out of the U.S. telecom market since a 2012 Congressional report raised concerns that its gear could be used by Beijing to spy on Americans, which Huawei has forcefully denied.
Spy chiefs from Australia to the U.K. have signaled concern that China could use Huawei for espionage, though no evidence of back doors or hacks related to the company has been produced. The U.S. has been pressing allies to shun Huawei gear in advance of an expected rollout of next-generation 5G networks, which would allow faster connection speeds and fuel a boom in connected devices, from autonomous vehicles to remote-controlled medical equipment.
Australia and New Zealand, key U.S. allies, have banned Huawei from their 5G network upgrades. Japan has excluded it from government purchasing, while the U.K. and Canada have said they are reviewing their telecom supply chains.
Despite the barriers, Huawei said last month it expected to report that 2018 revenue rose 21% to $108.5 billion. Mr. Ren said the company has already signed 30 5G commercial contracts and shipped 25,000 5G base stations out of China.
“We’re not a public company. We don’t care so much about beautiful balance sheets,” said Mr. Ren, who alternated between reading from prepared remarks and casually holding forth on the company’s history and vision. “As long as we can keep our employees fed I believe there will be a future for Huawei.”
Much of the suspicion around Huawei has centered on Mr. Ren himself—in particular his years spent in the Chinese military before founding the tele- com giant. In their 2012 report, Congressional investigators said Huawei refused to describe Mr. Ren’s full military background, and that they “struggled to get answers” about whether his military ties played any role in the company’s development. Mr. Ren maintains a tight grip on the company, but avoids the spotlight—rarely giving interviews and delegating public appearances to deputies. One of his last major public addresses was in 2015 at the World Economic Forum in Davos, where he discussed his military days and Huawei’s origins and rebutted spying charges.
On Tuesday Mr. Ren returned to the subject of his military experience, explaining that as an engineer he helped establish a synthetic-textile factory in the northeastern city of Liaoyang. Mr. Ren left the military in1983, four years before founding Huawei.
He also addressed another sticking point in his background: his attendance at a1982 National Congress of the Chinese Communist Party. He said he was invited as a reward for a widely publicized device he invented while in the military.
“Today, I still love my country,” Mr. Ren said. “I support the Communist Party of China, but I will never do anything to harm any other nation.”