Egalitarian beacon of creativity or instrument of state expansion?

Juliet Samuel

Katherine Rushton

ON THE face of it, Huawei’s rise is the tale of founder Ren Zhengfei and his extraordinary lone-wolf battle with Western corporate giants and Chinese state-owned behemoths.

Then, there is the other version of events, in which Mr Ren is an ex-army engineer who never completely left the fold. He is said to have used his contacts to secure government loans and subsidies, to win state contracts, and according to the US, to shut down investigations.

Over the last 30 years, Huawei has turned from an obscure import business into the biggest supplier of telecoms equipment in the world, boasting $122 billion (£99 billion) in revenues from 170 countries.

Its exponential growth has also brought close scrutiny of the company’s relationship with the Chinese state – not least of the 100 senior employees who have connections to the Chinese military or intelligence agencies.

One of those employees was allegedly Sun Yafang, the company’s chairman until 2018.

According to a CV published on the website of her former university, she previously worked at China’s equivalent of MI6, the Ministry of State Security. Huawei denies this is the case.

Then, there is the question of who actually owns the telecoms giant. Huawei’s response is that it is a “private company” owned by its employees, after Mr Ren made almost 99 per cent of the business available to his staff to buy. The organisation has a hefty “shareholder register” which it keeps in a glass display case and breaks out for visiting journalists.

But whilst it sounds democratic, the shares are only available to Chinese staff. Those moving jobs have to sell shares back to the company when they leave for another employer. Neither do they control company decisions.

More fundamentally, Christopher Balding and David Weaver – a pair of Mandarin-speaking professors expert, respectively, in Chinese business and Chinese law – claim that Huawei’s corporate structure grants control to a “Trade Union Committee”. Huawei denies this.

There is very little public information available on the governance of this committee, but the Chinese norm is that trade unions are ultimately controlled by the Chinese Communist Party, and senior union officials are treated as state employees.

In other words, they argue, Huawei is “in a non-trivial sense state-owned”.

Huawei says that this is incorrect, and that the Trade Union Committee is a legal requirement to protect employees’ rights.

A company spokesman said: “Huawei is an independent, privatelyheld company. We are not owned or controlled by, nor affiliated with the government or any other third-party corporation.”

Huawei has turned from an obscure import business into the world’s biggest supplier of telecoms equipment