Huawei boss shrugs off effects of COVID-19 and US sanctions

Ren Zhengfei, Huawei founder and head honcho, is maintaining his defiant public position in spite of mounting challenges.

It was the South China Morning Post’s turn to get a bit of exclusive face time with Ren, remotely of course. While many Chinese media are directly controlled by the Communist Party, the SCMP is considered to be relatively independent, notwithstanding the pressure the Chinese state can bring to bear on anyone operating within its borders.

The headline of the SCMP’s interview was ‘Founder Ren Zhengfei says Huawei ‘racing to develop’ new technologies amid coronavirus pandemic’. This was in reference to the ever-increasing amounts of cash Huawei is chucking at R&D these days. The apparent PR strategy behind this is to show how unbowed Huawei is by the dual threats of the pandemic and US sanctions.

“The US will continue to increase sanctions on us, and we will have to complete [the new technologies] before that happens,” said Ren, indicating that Huawei is striving to make full use of the ever-expanding sanction suspension window to stockpile equipment, IP, etc that will be denied it if the US ever decides to follow through on its threats.

While defiant as ever, Ren doesn’t downplay the significance of such an event. “It’s not a problem for us to survive as a company, but it’s questionable whether we can keep our leading position,” he said. “We won’t be able to lead the world in the next three to five years if we cannot develop our own technology.”

It feels like a bit of an overstatement to suggest that Huawei is entirely dependent on trade with the US for all its R&D, but full sanctions will certainly have a profound effect. But restrictions work both ways, with Ren noting: “US firms will also need [Huawei as a client] to survive.” This is probably what’s causing the US to drag its feet on the matter.

The coronavirus pandemic is generating further tensions between China and the West, as many western politicians feel China could have done a lot more to contain it and keep the rest of the world informed. None of this is going to stop the Huawei propaganda machine however. “Neither the US sanctions nor the pandemic had a major impact on us,” said Ren. “We believe the impact is minimal, and we can pull through it.”