The arrest of Meng Wangzhou, chief financial officer of tech giant Huawei , caused shockwaves:
The arrest of Meng Wangzhou, chief financial officer of the electronics giant Huawei and daughter of the firm’s founder Ren Zhengfei, has sent shockwaves through China.
Huawei is a domestic titan, a flagship firm pushing innovation as part of the country’s efforts to rise out of low-level manufacturing.
The success of Huawei’s smartphones have made it a real name in the consumer arena, while it has successfully penetrated markets all over the world with its telecoms equipment. With over two thirds of its revenues coming from outside the country, Huawei is an exemplary firm at a time when president Xi Jinping is trying to boost China’s efforts to innovate and compete with foreign rivals. It is a significant player in the strategy to beat the US in the ongoing trade war.
Despite this success, Huawei occupies a complex role in domestic corporate society. Changing Chinese policies mean a switch away from private-sector companies towards state-owned enterprises under president Xi. The days when China’s vast private-sector giants could do what they want may be coming to an end, and Huawei may be feeling the initial pain from this transition.
Meng’s father Ren Zhengfei didn’t make the list of top 100 entrepreneurs for the forthcoming celebrations to mark the 40th anniversary of opening up and reform. Although he was in the People’s Liberation Army, Mr Ren wasn’t allowed join the Communist Party because his family had links to the Nationalist KMT before the Revolution in 1949. While it is a champion of domestic innovation, Huawei’s relationship with the Communist Party is complicated, reflecting changing attitudes to private companies in China.
Despite these complications, for the time being the official message is to shore up support for domestic companies. The strident nationalist title Global Times, although not a direct publication from the Communist Party, can always be relied upon for insights into official thinking.
“We call on the Chinese government and society to offer moral support to Huawei and Chinese diplomats to offer timely
assistance to Meng,” it said in an editorial. “Obviously Washington is resorting to a despicable rogue’s approach as it cannot stop Huawei’s 5G advance in the market,” it said.
“We also support Huawei in its legal battle with the US to prove its innocence and thwart some Americans’ plot to throw the company off track,” it said.
A court drawing of Huawei chief financial officer Meng Wanzhou, who was arrested on an extradition warrant, at her bail hearing in Vancouver, Canada, yesterday