Huawei founder says company would not share user secrets

January 15, 2019

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Ren Zhengfei, founder and CEO of Huawei, laughs during a round table meeting with the media in Shenzhen city, south China's Guangdong province, on Tuesday. — AP
Ren Zhengfei, founder and CEO of Huawei, laughs during a round table meeting with the media in Shenzhen city, south China's Guangdong province, on Tuesday. — AP

The founder of Huawei on Tuesday said his company would refuse to disclose secrets about its customers and their communication networks, trying to lay to rest concerns the Chinese tech giant might spy for the Communist government.

Ren Zhengfei spoke in a rare meeting with foreign reporters as Huawei Technologies Ltd, China's first global tech brand, tries to protect its access to global telecom carriers that are investing heavily in next-generation technology.

Ren's comments were the 74-year-old former military engineer's most direct public response to accusations the world's biggest maker of telecom network gear is controlled by the ruling Communist Party or is required to facilitate Chinese spying.

The United States, Australia, Japan and some other governments have imposed curbs on use of its technology over such concerns.

"We would definitely say no to such a request," Ren said when asked how the company would respond to a government demand for confidential information about a foreign customer.

Asked whether Huawei would challenge such an order in court, Ren chuckled and said it would be up to Chinese authorities to "file litigation".

Ren said neither he nor the company have ever received a government request for "improper information" about anyone.

Huawei is facing heightened scrutiny as phone carriers prepare to roll out fifth-generation technology in which the company is a leading competitor. 5G is designed to support a vast expansion of networks to serve medical devices, self-driving cars and other technology. That increases the cost of potential security failures and has prompted governments increasingly to treat telecoms communications networks as strategic assets.

The company's image suffered a new blow last week when Polish authorities announced one of its Chinese employees was arrested on spying charges.

Huawei announced it fired the employee and said the allegations had nothing to do with the company.

Ren is the father of Huawei's chief financial officer, Meng Wanzhou, who was arrested on December 1 in Canada on US charges related to possible violations of trade sanctions on Iran.

Ren said he couldn't discuss Meng's case while it still was before a court.

But he said Huawei obeys the law, including export restrictions, in every country where it operates.

"After all the evidence is made public, we will rely on the justice system," he said.

"We are sure there will be a just conclusion to this matter."

Two Canadians were arrested by Chinese authorities on national security charges, prompting suggestions abroad they might be hostages to secure Meng's release.

On Monday, a Chinese court sentenced a Canadian to death in a drug case after he was ordered retried.

Asked how he felt about suggestions Beijing took hostages in a case linked to Huawei, Ren said he saw no connection between the Canadians and Meng.

Ren, one of the oldest Chinese executives still working, was jovial and animated during the two hours and 20 minute meeting.

Dressed in a blue sport coat and an open-necked light blue shirt, he was accompanied by two Huawei board members, Chen Lifang and William Xu, and other company managers.

Ren said he became a Communist Party member in the early 1980s after the state press published reports about his development of a measuring tool for an engineering project.

Before then, he could not join because his father was deemed a "capitalist roader," but the party was trying to promote young, technologically capable people following the end of the violent, ultra-radical Cultural Revolution in 1976.

Ren founded Huawei in 1987 to sell imported telecom switching gear to Chinese phone companies after the People's Liberation Army disbanded his engineering unit, according to the company.

Ren said that despite his party membership, Huawei makes decisions based on its customers' needs.

"I don't see a close connection between my personal political beliefs and our commercial decisions," he said.

Huawei's US market evaporated in 2012 after a congressional panel said the company and its smaller Chinese rival, ZTE Corp., were security risks and urged phone companies to avoid them.

Despite that, Huawei says it expects last year's revenue to exceed $100 billion. Ren said this year's target is $125 billion.

Huawei says it is employee-owned.

Ren said no government entity or any other investor who isn't a current or former employee owns "once cent of Huawei shares".

Ren said Huawei has no research cooperation with the ruling party's military wing, the PLA. He said the company has no dedicated unit for military sales and he knew of no purchases of civilian technology by the PLA.

Ren cited comments by Chinese government spokespeople who rejected suggestions, including by a vice president of the European Union, that Huawei and other vendors might be required to install secret "backdoors" to facilitate eavesdropping under a law enacted last year that requires them to cooperate with intelligence agencies.

Huawei has plenty of opportunities even if it faces higher barriers in some markets, Ren said. He said the company has signed 5G contracts with 30 carriers and has shipped 25,000 base stations.

Ren also warned against allowing security concerns to divide the globe into isolated markets with incompatible technology standards a scenario some people have suggested might result from US-Chinese tensions.

"Arbitrarily dividing the world into two technology camps can only harm the interests of all society," he said.

Asked about US President Donald Trump's suggestion he might intervene in Meng's case if that facilitated a resolution of Washington's tariff battle with Beijing, Ren said he would wait to see whether Trump takes action.

"As for President Trump as president, I still believe he is a great president," Ren said.

He said Trump was elected to cut taxes, which he believed was beneficial for American industry.

However, he said, "If companies are getting frightened by the detention of certain individuals, then investors might be scared away, and that is not in the interests of the United States."

Ren said he didn't believe Huawei would face US penalties similar to those that nearly drove ZTE Corp. out of business.

Washington barred ZTE from buying American technology over its exports to Iran and North Korea but restored access after the company paid a $1 billion fine, replaced its executive team and installed US-selected compliance monitors.

"If it did happen to Huawei, I don't believe the impact would be very significant," he said.

"I believe telecom operators would continue to trust Huawei."

Ren said Huawei doesn't want Beijing to retaliate for foreign restrictions by hampering market access for Apple Inc. and other rivals.

"In spite of setbacks in some countries, we are still supportive of China becoming a more open country," he said.