Chindia Alert: You’ll be Living in their World Very Soon
aims to alert you to the threats and opportunities that China and India present. China and India require serious attention; case of ‘hidden dragon and crouching tiger’.
Without this attention, governments, businesses and, indeed, individuals may find themselves at a great disadvantage sooner rather than later.
The POSTs (front webpages) are mainly 'cuttings' from reliable sources, updated continuously.
The PAGEs (see Tabs, above) attempt to make the information more meaningful by putting some structure to the information we have researched and assembled since 2006.
BEIJING, Oct. 2 (Xinhua) — While turning 70 often signals the beginning of a person’s twilight years, for the People’s Republic of China (PRC) it marks a golden age full of hope and vigor.
The PRC celebrated its 70th birthday on Oct. 1. China’s transformation from an agricultural society isolated from the West into the world’s second-largest economy open wide is nothing short of a miracle.
More importantly, it has charted a new path for developing countries to modernize.
Seven decades ago, the war-ravaged country started from scratch. Observers are astonished at China’s large-scale modernization, its reduction of the number of people living in poverty and the sheer volume of its consumer market. Their heads have been turned not only because of the speed of the transition but also by the unique path taken to realize this great transformation.
Reflecting on its past and present, and through experimentation, China has identified and will continue down the right path — socialism with Chinese characteristics.
Reform is the engine of China’s miracle. There is no ready-made solution for the development issues facing China. From creating special economic zones to building free trade pilot zones, from carrying out family-based production contracts to revitalizing state-owned enterprises, China has been one of the most successful countries in piloting reforms over the past decades. Now the reform is more in-depth and more comprehensive in economic, political, cultural, social and ecological sectors.
The Chinese government stresses being effective and responsive to the public interest. Development outlines are far-sighted. For example, the five-year plans are made to deal with comprehensive aspects that concern human development: food, transportation, communication, environment, health and education. These plans are a priority for the government.
Of course these achievements could never have been realized without the leadership of the CPC.
From the people and for the people, the CPC has always upheld its principle of striving for the happiness of the people and the rejuvenation of the nation.
At a life-or-death moment, the CPC shouldered the mission of saving the nation from existential peril. After 28 years of bloody struggle, it led the Chinese people to overthrow the “three mountains” placed on their heads and put an end to the semi-colonial and semi-feudal society of old China. Gone are the days where any attempt to bully China with “fists” or “intimidation” would succeed.
Despite overseas doubts, misunderstandings and predictions that its survival would be short-lived, the CPC has stunned the world with its leadership, innovative theories and ability to unite and organize the people.
It abolished the agricultural tax that had been in place for more than 2,600 years; it established a political system in which people are masters of their own affairs; it did its utmost to help people shake off poverty and keep nearly 1.4 billion people well-off.
No ruling party in the world can match the CPC’s record of adhering to the truth, versing itself in self-reform and self-purification, and turning impossibility into certainty in the face of difficulties and challenges, again and again.
The 70-year journey was never smooth. Trials and hardships abounded. The Chinese people dealt with floods and massive earthquakes and guarded against SARS and financial tsunamis. Yet these twists and turns never blocked China’s way forward but made it more sober, determined and mature.
Today, more than at any other time in history, China is closer to, more confident and more capable of achieving the great rejuvenation of the Chinese nation. However, lofty goals are never easily reached.
The world has been undergoing tremendous changes unseen in a century. Resistant external forces and headwinds still remain. “Zero-sum game” and “superior civilization” mentalities, among others, are prevailing.
The CPC will continue to lead the Chinese people to fight trade bullying, blackmailing and hegemonism. Only the CPC can lead China to emerge as a stronger country.
It all started long ago, and the journey is far from over.
New system to enable businesses and government agencies to verify mainland-issued travel permits
The new system is expected to expand access to the public transport system on the mainland. Photo: Roy Issa
Hong Kong and Macau residents and “overseas Chinese” may soon be able to have full access to public services on the mainland using their China-issued travel documents, state news agency Xinhua reported.
Xinhua reported on Wednesday that the National Immigration Administration was putting a platform in place to enable government agencies and businesses to verify mainland-issued travel permits for Hong Kong and Macau residents.
“As soon as the platform becomes operational, these overseas travellers can, from October, have access to 35 public services, ranging from transport, to finance, education, communications, medical care and accommodation,” the report said.
According to the report, “overseas travellers” cover Hong Kong and Macau residents and ethnic Chinese living overseas.
But it did not say why the new measures did not apply to people from Taiwan.
The administration did not respond to requests for comment on Thursday.
Will Hong Kong anti-government protests ruin city’s role in Beijing’s Greater Bay Area plan? Depends on whom you ask
The new measure appears to be part of a long-term strategy by Beijing to foster closer ties between the mainland and Hong Kong and Macau.
In the last few years, the central government has launched a host of incentives for Hong Kong and Macau residents and businesses, including opportunities in the Greater Bay Area development plan in southern China.
Ivan Zhai, executive director of the Hong Kong Chamber of Commerce in China-Guangdong, welcomed the new measure.
“If such an arrangement can be fully implemented, Hong Kong businesspeople who operate on the mainland will be thrilled,” Zhai said.
The Hong Kong business community has long lobbied for relaxation over areas such as train ticketing and hotel registration.
Zhai said that although Hong Kong and Macau residents could now book high-speed train tickets with their mainland-issued travel permits, there were few ticket machines that could automatically read the permits, complicating the process.
“There are also hotels on the mainland that can only entertain guests with Chinese identity cards and currently Hong Kong travellers can only go to hotels that are authorised to accept the mainland-issued travel permits,” he said.
China’s regulator relaxes currency conversion rules throughout Shenzhen, sharpening city’s edge in Greater Bay Area
According to the report, there will be stiff penalties for departments or businesses misusing information collected through the platform.
Zhai said Hong Kong businesspeople who travelled to the mainland often were more likely to be concerned about convenience than the risk of invasion of privacy.
“If you are a frequent traveller in China, you would have expected that the relevant departments of the Chinese government already have information about you anyway,” he said.
Huawei has denied that it has any links to the Chinese government.
Huawei’s cyber-security chief John Suffolk told MPs on Monday that the tech giant had never been asked by China or any other government to “do anything untoward”.
Mr Suffolk said Huawei welcomed outsiders to analyse its products and detect engineering or coding flaws.
“We stand naked in front of the world, but we would prefer to do that, because it enables us to improve our products.”
He added: “We want people to find things, whether they find one or one thousand, we don’t care. We are not embarrassed by what people find.”
Huawei was invited to the Technology and Science Select Committee to answer questions from MPs on the security of its equipment, and its links to the Chinese government.
The US has encouraged allies to block Huawei – the world’s largest maker of telecoms equipment – from their 5G networks, saying the Chinese government could use its products for surveillance.
Image copyright PARLIAMENT TVImage caption Huawei’s cyber-security chief John Suffolk said the tech giant has no access to mobile networks
“We’ve never had a request from the Chinese government to do anything untoward at all,” said Mr Suffolk.
“We have never been asked by the Chinese government or any other government, I might add, to do anything that would weaken the security of a product.”
They asked whether Huawei was required to provide equipment to Xinjiang province, especially in light of the 2017 Chinese intelligence law, which requires individuals and associations to comply with Chinese intelligent agencies.
Mr Suffolk said: “We have had to go through a period of clarification with the Chinese government, that has come out and made it quite clear that that is not the requirement of any company.
“We’ve had that validated via our lawyers and revalidated by Clifford Chance…according to our legal advice, that does not require Huawei to undertake anything that weakens Huawei’s position in terms of security.”
Remote access
MPs asked whether Huawei would be able to remotely access the UK’s 5G mobile networks via its equipment.
Image copyright GETTY IMAGESImage caption Huawei said it would have no access to any data on a 5G mobile network
In reply, Mr Suffolk stressed that Huawei is a provider of telecommunications equipment to mobile network operators.
“We don’t run networks, and because we don’t run the network, we have no access to any of the data that is running across that network,” he said.
He also explained that Huawei is only one of about 200 vendors who would be providing various different bits of equipment that would eventually make up a 5G network in the UK.
However, if an operator were to have a problem with Huawei equipment, a support centre based in Romania would be able to remotely access the equipment to fix the problem.
MPs wanted to know whether it would be possible for a 5G network to be used to track an individual user.
In response, Mr Suffolk explained that mobile phone technology requires the mobile operator to constantly track a user’s phone, in order to be able to connect them to the mobile network.
By that logic, the operator is constantly tracking all of its customers, all the time.
He also told MPs that only about 30% of the the components in Huawei products are actually made by the company – the rest of the components are obtained from a global supply chain that Huawei closely monitors in order to prevent security breaches.
Few signs of Eid celebrations after crackdown that has seen a reported million Uygurs and other minorities interned in camps
Muslims in far western Chinese region say they are now ‘too scared’ to practise their faith in public
Worshippers leave a mosque in Kasghar after prayers on Wednesday. Photo: AFP
The corner where Heyitkah mosque in China’s far western region of Xinjiang once hummed with life is now a car park where all traces of the tall, domed building have been erased.
While Muslims around the world celebrated the end of Ramadan with prayers and festivities this week, the recent destruction of dozens of mosques in Xinjiang highlights the increasing pressure Uygurs and other ethnic minorities face in the heavily policed region.
Behind the car park in the city of Hotan, the slogan “Educate the people for the party” is emblazoned in red on the wall of a primary school where students must scan their faces upon entering the razor-wired gates.
The mosque “was beautiful,” recalled a vendor at a nearby bazaar. “There were a lot of people there.”
Satellite images reviewed by AFP and visual analysis non-profit Earthrise Alliance show that 36 mosques and religious sites have been torn down or had their domes and corner spires removed since 2017.
Satellite images from 2014 (top) and March this year show the disappearance of the dome of the Karamay West Mosque in Xinjiang. Photo: AFP/ Distribution Airbus Defence and Space/ CNES 2019/ Produced By Earthrise
In the mosques that are open, worshippers go through metal detectors while surveillance cameras monitor them inside.
“The situation here is very strict, it takes a toll on my heart,” said one Uygur, who requested anonymity for fear of reprisals. “I don’t go any more,” he added, referring to mosques. “I’m scared.”
In the ancient Silk Road city of Kashgar, no longer does the sunrise call for prayer echo throughout the city – a ritual the manager of the city’s central mosque once proudly shared with touristsOn Wednesday, locals celebrating Eid al-Fitr quietly filed into the entrance of state-approved Idkah Mosque – one of the largest in China – as police and officials fenced off the wide square surrounding the building and plain clothes men monitored every person’s actions.
It was another low-key Ramadan for Muslims in Xinjiang, where restaurants were busy serving food to customers throughout the day, a time when practising Muslims fast.
In Hotan on Friday – a holy day for believers – the only mosque in the city was empty after sundown, an important prayer session when Muslim families typically break their daily Ramadan fast.
Earlier in the day, at least 100 people attended a midday session but the vast majority were elderly men.
Human Rights Watch decodes surveillance app used to classify people in China’s Xinjiang region
The ruling Communist Party “sees religion as this existential threat”, said James Leibold, an expert on ethnic relations and policy in China at La Trobe University.
Over the long term, the Chinese government wants to achieve “the secularisation of Chinese society,” he told AFP.
The Xinjiang government told AFP that it “protects religious freedoms” and citizens can celebrate Ramadan “within the scope permitted by law”, without elaborating.
The authorities have thrown a hi-tech security net across the region, installing cameras, mobile police stations and checkpoints in seemingly every street in response to a spate of deadly attacks blamed on Islamic extremists and separatists in recent years.
An estimated one million Uygurs and other Turkic-speaking ethnic groups are held in a vast network of internment camps.
After initially denying their existence, Chinese authorities last year acknowledged that they run “vocational education centres” aimed at steering people clear of religious extremism by teaching them Mandarin and China’s laws.
In those centres, it was a different Ramadan.
The Xinjiang government told AFP that people in the centres are not allowed to hold religious activities because Chinese law forbids it within education facilities, but they are free to do so “when they return home on weekends”.
Uygur men dance after Eid al-Fitr prayers in Kashgar. Photo: Greg Baker/ AFP
In recent years, Chinese authorities have ramped up controls on public displays of religion and Islamic traditions in Xinjiang.
AFP reporters did not see any veiled women and few men sporting long beards during a week-long visit to the region. Former internment camp inmates have said they were incarcerated for these outward signs of their religion.
Places of worship too have become targets of Beijing’s draconian security measures.
Human Rights Watch decodes surveillance app used to classify people in China’s Xinjiang region
In the satellite images analysed by AFP and Earthrise Alliance, 30 religious sites were completely demolished while six had their domes and corner spires removed.
AFP reporters visited about half a dozen sites, and found that some mosques had been repurposed into public spaces.
Police officers blocked journalists from entering Artux, just north of Kashgar, where the town’s grand mosque and dozens of other community mosques were destroyed.
The area is some 22 kilometres (14 miles) away from an enormous complex believed to be a re-education centre. Visible from a nearby village, the facility has razor-wired walls, watchtowers and imposing block buildings.In Kashgar, two cameras perched on the columns of a former mosque point at its entrance. There is no minaret or dome – instead, a shop selling dresses lies to its right alongside houses.
A demolished mosque in Hotan has been converted into a garden, paved with concrete walkways and sparsely planted trees.
On the outskirts of town, situated between a cemetery and sand dunes, two white flags and a pile of burned refuse and debris was all that was left of an old shrine named Imam Asim.
China’s top Xinjiang official Chen Quanguo should face sanctions over alleged abuses, US lawmakers say
Uygurs consider these mosques and shrines “their ancestral heritage,” said Omer Kanat, director of the Uygur Human Rights Project.
“The Chinese government just wants to erase everything … that is different from Han, everything which belongs to Uygur culture or Islamic culture in the region,” he said.
Juma Maimaiti, the official imam of Idkah Mosque, told AFP in an interview arranged by the propaganda department that the demolition of mosques “has never happened here”.
“But our government has proceeded to protect some key mosques,” he added, and said that the city of Kashgar has over 150 mosques.
A propaganda slogan and surveillance camera at a mosque in Yangisar, south of Kashgar. Photo: AFP
Though Beijing’s restrictions on religious piety, such as fasting, are not new, observers say conditions have deteriorated to the point where celebrations for the holy month in Xinjiang are reduced or largely invisible.
Islamic greetings and openly fasting in public are no longer permitted, said Darren Byler, a lecturer at the University of Washington who focuses on Uygur culture.
While there are Uygurs who continue to practise their faith, they are “internalising it at this moment – they’re not expressing it openly,” he said.
EU calls out Beijing on human rights but activists want harder line against China’s Xinjiang and Tibet policy
At state-backed mosques, religious activity is controlled as Beijing pursues a five-year plan to “Sinicise” Islam as the “only way for a healthy development of Islam” in the country, said Yang Faming, president.
Deliveries will start in the next six to 10 months, carmaker says
Tesla will take on Chinese carmakers such as Geely and SAIC, and electric car start-ups including Nio and Xpeng Motors
Tesla said on Friday that its Model 3 electric car, which will be assembled in China, will be ready for deliveries in six to 10 months. Photo: AFP
Customers can pre-order the Model 3 assembled in China after Tesla announced on Friday that it would be priced 13 per cent lower than the US imports, taking the electric carmaker a step closer in tapping the world’s largest EV market.
The standard range plus Model 3 car that Tesla plans to assemble at the Gigafactory 3 in Lingang, Shanghai, will be priced at 328,000 yuan (US$47,529), 49,000 yuan cheaper than the same model currently imported from the US.
Tesla’s US-built cars are now subject to a 25 per cent import duty in China. The bestselling US electric carmaker plans to start deliveries in the next six to 10 months.
“Today we announced that Model 3 Standard Range Plus vehicles built at Gigafactory Shanghai will begin at 328,000 yuan for our customers in China,” Tesla said in a statement.
Aerial view of the Tesla Shanghai Gigafactory under construction in Lingang, Shanghai, on May 10, 2019. Photo: Imaginechina
The model has a range of 460km and a top speed of 225km/h.
Industry observers said that the price of the locally made car aimed at the mass market is on the higher side, adding that a 300,000 yuan price tag could attract thousands of Chinese buyers.
“If a Chinese customer can buy a Tesla car for less than 300,000 yuan, many of them will make a decision on the spur of the moment since it is viewed as the best EV in the world,” said Tian Maowei, a sales manager at Shanghai-based Yiyou Auto Service.
Tesla rushes Model 3s to China before trade war truce expires
US President Donald Trump has signed an executive order barring US companies from using telecoms equipment made by companies that pose a threat to national security, a move aimed at shutting out Huawei Technologies.
US technology companies including Google and Microsoft have severed business ties with Huawei to comply with the US trade ban.
Tesla’s Gigafactory 3 is expected to make around 3,000 Model 3 vehicles a week in the initial phase. Photo: AP
In January, Tesla started construction on a US$5 billion wholly-owned plant in Shanghai, the city’s single largest foreign direct investment just three months after it secured a land parcel to make electric cars locally.
The factory will produce Model 3 and Model Y electric vehicles that are seen as affordable to drivers in China.
Podcast: Here’s how the US-China tech war is affecting small electronics companies
Gigafactory 3 is expected to make around 3,000 Model 3 vehicles a week in the initial phase, ramping up to 500,000 per year when it becomes fully operational, Tesla said.
Tesla will take on Chinese carmakers such as Geely and SAIC and electric car start-ups including Nio and Xpeng Motors in China where sales of new-energy vehicles including battery-powered and plug-ins are expected to jump 27 per cent this year to 1.6 million units, according to the China Association of Automobile Manufacturers.
In March Beijing announced a cut in cash subsidies offered to NEV buyers by up to 60 per cent, believing it was time to remove the crutches and cull an industry that had spawned hundreds of small manufacturers.
It is unclear whether Tesla vehicles will receive subsidies from the Chinese government.
The African Union headquarters in Addis Ababa is a shiny spaceship-like structure that glistens in the afternoon sun.
With its accompanying skyscraper, it stands out in the Ethiopian capital.
Greetings in Mandarin welcome visitors as they enter the lifts, and the plastic palm trees bear the logos of the China Development Bank.
African Union HQ, Addis Ababa
Everywhere, there are small indications that the building was made possible through Chinese financial aid.
In 2006, Beijing pledged $200m to build the headquarters. Completed in 2012, everything was custom-built by the Chinese – including a state-of-the-art computer system.
For several years, the building stood as a proud testament to ever-closer ties between China and Africa. Trade has rocketed over the past two decades, growing by about 20% a year, according to international consultancy McKinsey. China is Africa’s largest economic partner.
But in January 2018, French newspaper Le Monde Afrique dropped a bombshell.
It reported that the AU’s computer system had been compromised.
The newspaper, citing multiple sources, said that for five years, between the hours of midnight and 0200, data from the AU’s servers was transferred more than 8,000km away – to servers in Shanghai.
This had allegedly continued for 1,825 days in a row.
Le Monde Afrique reported that it had come to light in 2017, when a conscientious scientist working for the AU recorded an unusually high amount of computer activity on its servers during hours when the offices would have been deserted.
It was also reported that microphones and listening devices had been discovered in the walls and desks of the building, following a sweep for bugs.
The reaction was swift.
Both AU and Chinese officials publicly condemned the report as false and sensationalist – an attempt by the Western media to damage relations between a more assertive China and an increasingly independent Africa.
But Le Monde Afrique said that AU officials had privately expressed concerns about just how dependent they were on Chinese aid – and what the consequences of that could be.
In the midst of all of this, one fact remained largely unreported.
The main supplier of information and communication technology systems to the AU headquarters was China’s best-known telecoms equipment company – Huawei.
The company says it had “nothing” to do with any alleged breach.
Huawei “served as the key ICT provider inside the AU’s headquarters”, said Danielle Cave of the Australian Strategic Policy Institute, in a review of the alleged incident.
Huawei headquarters in Shenzhen, China
“This doesn’t mean the company was complicit in any theft of data. But… it’s hard to see how – given Huawei’s role in providing equipment and key ICT services to the AU building and specifically to the AU’s data centre – the company could have remained completely unaware of the apparent theft of large amounts of data, every day, for five years.”
There is no evidence to indicate that Huawei’s telecoms network equipment was ever used by the Chinese government – or anyone else – to gain access to the data of their customers.
Indeed, no-one has ever gone on record to confirm that the AU system was compromised in the first place.
But these reports played into years of suspicions about Huawei – that a large Chinese company might find itself unduly influenced by the Chinese government.
Ren and the rise of Huawei
“When I first started out 30 years ago… we didn’t really have any telephones. The only phones we had were those hand-cranked phones that you see in old World War II films. We were pretty undeveloped then.”
Huawei’s founder and chairman Ren Zhengfei is reminiscing to the BBC about the origins of the world’s second-biggest smartphone firm, while sitting in the Huawei headquarters in Shenzhen – a symbol of the success that he’s worked his whole lifetime for.
A long marbled staircase, covered in plush red carpet, greets you as you first walk in.
At the top of the stairs, a giant painting depicts a traditional Chinese New Year scene.
Inside Huawei’s Shenzhen HQ
A few kilometres away in Dongguan, Huawei’s latest campus is even more eye-catching.
The site – designed to accommodate the company’s 25,000 R&D staff – comprises 12 “villages”, each of which recreates the architecture of a different European city, among them Paris, Bologna and Granada.
It’s as if Silicon Valley had been re-imagined by Walt Disney. Long corridors of Roman pillars and picturesque French cafes adorn the campus, with a train connecting the different areas, running through manicured gardens and past an artificial lake.
It’s a world away from the environment that Mr Ren found himself in when he first started the company in 1987. “I founded Huawei when China began to implement its reform and opening up policy,” he says. “At that time, China was shifting from a planned economy to a market economy. Not only people like myself, but even the most senior government officials, did not have the vaguest idea of what a market economy was. It seemed it was hard to survive.”
Ren was born in 1944 in Southern China – a tumultuous, chaotic place, one of the poorest regions in an already destitute country.
For a long time, hardship was all he ever knew.
He was from a family of seven children. “They were very poor,” says David De Cremer, who has co-written a book on Ren and Huawei.
“I think hardship is something that you can see throughout his life, and which he keeps emphasising himself.”
To escape that life of poverty and drudgery, Ren did what many young Chinese men of that era did. He joined the army.
Soldiers from the People’s Liberation Army, 1972
“I was a very low-ranking officer in the People’s Liberation Army,” he says. “I served in an ordinary construction project, not a field unit. At the time, I was a technician of a company in the military, and then I became an engineer.”
He left the military in 1983 when China began to downsize its forces, and went into the electronics business.
By his own admission, he wasn’t a great businessman at first.
“I was someone who had been in the military all my life at the time, used to doing what I was told,” he says. “Suddenly, I began to work in a market economy. I was at a total loss. So I too suffered losses, I too was deceived, and I was cheated.”
But he was quick to learn, and was a keen student of Western business practices and European history.
“I did research on what exactly a market economy was all about,” he says. “I read books on laws, including those about European and US laws. At that time, there were very few books on Chinese laws, and I had to read those on European and US laws.”
Five years later, he founded Huawei – the name can be translated as “splendid achievement” or “China is able” – to sell simple telecoms equipment to the rural Chinese market. Within a few years, Huawei was developing and producing the equipment itself.
Sometime in the early 90s, Huawei won a government contract to provide telecoms equipment for the People’s Liberation Army.
By 1995, the company was generating sales of around US$220,000, mainly from selling to the rural market.
The following year Huawei was given the status of a Chinese “national champion”. In practice, this meant the government closed the market to foreign competition.
At a time when China’s economy was growing by an average of 10% per year, this was no small advantage. But it was only when Huawei started to expand overseas in 2000, that it really saw its sales soar.
In 2002, Huawei made US$552m from its international market sales. By 2005 its international market contracts exceeded its domestic business for the first time.
Ren’s early days in business instilled in him a desire to protect his company from the whims and fancies of the stock market. Huawei is privately held and employee-owned. This gave Ren the power to plough more money back into research and development. Each year, Huawei spends US$20bn on R&D – one of the biggest such budgets in the world.
“Publicly listed companies have to pay a lot of attention to their balance sheets,” he says. “They can’t invest too much, otherwise profits will drop and so will their share prices. At Huawei, we fight for our ideals. We know that if we fertilise our ‘soil’ it will become more bountiful. That’s how we’ve managed to pull ahead and succeed.”
One story from the early days of the company tells how Ren was cooking for his staff (he loves to cook, or so the story goes). Suddenly he rushed out of the kitchen and announced to the room: “Huawei will be a top three player in the global communications market 20 years from now!”
And that’s exactly what happened. In fact, those ambitions were surpassed.
Today, Huawei is the world’s biggest seller of network telecommunications equipment.
From aspiring to be a company like Apple, it now sells more smartphones than Apple.
But shadows have continued to loom over Huawei’s international success.
Ren and Huawei’s links to the Chinese Communist Party have raised suspicions that the company owes its meteoric rise to its powerful political connections in China. The US has accused Huawei of being a tool of the Chinese government.
It’s an accusation which Ren denies. “Please don’t think that Huawei has become what it is today because we have special connections,” he says. “Even 100% state-owned companies have failed. Do good connections mean you will succeed then? Huawei’s success is still very much due to our hard work.”
The case against
It was 1 December 2018. US President Donald Trump and China’s President Xi Jinping were dining on grilled sirloin followed by caramel rolled pancakes at the G20 summit in Buenos Aires.
They had a lot to discuss. The US and China were in the middle of a trade war – imposing tariffs on each other’s goods – and growth forecasts for both countries had recently been cut as a result. This was adding to the fear of a slowing global economy.
In the event, the two leaders agreed a truce in the trade war, with Donald Trump tweeting that “Relations with China have taken a BIG leap forward!”
Xi Jinping and Donald Trump at dinner, December 2018
But thousands of kilometres north in Canada, an arrest was taking place that would throw doubt on this rapprochement.
Meng Wanzhou, Huawei’s chief financial officer and Ren Zhengfei’s eldest daughter, had been detained by Canadian officials while transferring between flights at Vancouver airport.
The arrest had come at the request of the US, who accused her of breaking sanctions against Iran.
“When she was detained, as her father, my heart broke,” says Ren, visibly emotional. “How could I watch my child suffer like this? But what happened, has happened. We can only depend on the law to solve this problem.”
Meng Wanzhou being driven to court in Canada
Huawei’s problems were just beginning. Nearly two months later, the US Department of Justice filed two indictments against Huawei and Ms Meng.
Under the first indictment, Huawei and Ms Meng were charged with misleading banks and the US government about their business in Iran.
The second indictment – against Huawei – involved criminal charges including obstruction of justice and the attempted theft of trade secrets.
Both Huawei and Ms Meng deny the charges.
January 2019: Acting US attorney general Matthew Whittaker announces charges against Huawei and Meng Wanzhou
The charge of stealing trade secrets centres on a robotic tool – developed by T-Mobile – known as Tappy.
According to legal documents, Huawei had tried to buy Tappy, a device which mimicked human fingers by tapping mobile phone screens rapidly to test responsiveness.
T-Mobile was in partnership with Huawei at the time, but it rebuffed the Chinese firm’s offers, fearing it would use the technology to make phones for T-Mobile’s competitors.
It’s alleged that one of Huawei’s US employees then smuggled Tappy’s robotic arm into his satchel so that he could send its details to colleagues in China.
After the alleged theft was discovered, the Huawei employee claimed that the arm had mistakenly fallen into his bag.
Huawei claimed that the employee had been acting alone, and the case was settled out of court in 2014. But the latest case is built on email trails between managers in China and the company’s US employees, linking Huawei management to the alleged theft.
The indictment also details evidence of a bonus scheme from 2013, offering Huawei employees financial rewards for stealing confidential information from competitors.
Huawei has denied any such scheme exists.
Meng Wanzhou, photographed in 2014
This is not the first time that Huawei has been accused of stealing trade secrets. Over the years companies like Cisco, Nortel and Motorola have all pointed the finger at the Chinese firm.
But US fears about Huawei are about much more than industrial espionage. For more than a decade, the US government has seen the company as little more than an arm of the Chinese Communist Party.
These concerns have been brought to the fore with the advent of “fifth generation” or 5G mobile internet, which promises download speeds 10 or 20 times faster than at present, and much greater connectivity between devices.
As the world’s biggest telecoms infrastructure provider, Huawei is one of the companies best placed to build new 5G networks. But the US has warned its intelligence partners that awarding contracts to Huawei would be tantamount to allowing the Chinese spy on them.
US Secretary of State Mike Pompeo recently cautioned against Huawei, saying, “If a country adopts this and puts it in some of their critical information systems, we won’t be able to share information with them.”
US Secretary of State Mike Pompeo
The UK, Germany and Canada are reviewing whether Huawei’s products pose a security threat.
Australia went a step further last year, and banned equipment suppliers “likely to be subject to extrajudicial directions from a foreign government”.
Huawei was not mentioned by name, but Danielle Cave of the Australian Strategic Policy Institute says the company posed a national security risk because of its government links.
She cites an article in Chinese law that makes it impossible for any company to refuse to help the Chinese Communist Party in intelligence gathering.
“Admittedly, what is missing from this debate is the smoking gun,” she says.
“For the average person who has a Huawei smartphone it’s not a big deal. But if you’re a Western government that has key national security to protect – why would you allow this access to a company that is in the political system that China is in?”
For his part, Ren says that Huawei’s resources have never and would never be used to spy for the Chinese government.
“The Chinese government has clearly said that it won’t ask companies to install backdoors,” he says. A “backdoor” is a term used to describe a secret entry point in software or a computer system that gives access to the person or entity who installed it to the inner workings of the system.
“Huawei will not do it either,” he continues. “Our sales revenues are now hundreds of billions of dollars. We are not going to risk the disgust of our country and our customers all over the world because of something like that. We will lose all our business. I’m not going to take that risk.”
Xi’s China
Zhou Daiqi is Huawei’s chief ethics and compliance officer.
He’s been with the company for nearly 25 years, in a number of different positions – chief engineer, director of the hardware department, head of the research centre in Xi’an, according to his biography on the company’s website. He is also understood to combine his high-ranking executive duties with another role – party secretary of Huawei’s Communist Party committee.
All companies in China are required by law to have a Communist Party committee.
Zhou Daiqi’s profile on Huawei’s website
The official line is that they exist to ensure that employees uphold the country’s moral and social values. Representatives of the committee are also often tasked with helping workers with financial problems.
But critics of China’s one-party system argue that they allow the state to exert control on corporate China. And they say the level of this control has increased in recent years.
“[President] Xi Jinping is exerting greater control over the business community in China,” says Elliott Zaagman, who regularly advises Chinese companies on their PR strategy. “As these companies gain power and influence overseas, the party doesn’t want to lose control over them.”
Ren, however, argues that the role of Huawei’s Communist Party committee is far less important than many in the West believe.
“[It] serves only to educate its employees,” he says. “It is not involved in any business decisions.”
In China, most chief executives are Communist Party members.
Every year, they dutifully turn up to the National People’s Congress along with local and national party chiefs, officials and chief executives.
It’s where the big economic decisions are voted on – although no proposal is put forward which hasn’t already been agreed upon.
Still, big CEOs come to show their commitment to the party, and to contribute to working papers that are meant to help the government understand the concerns of the business community.
Being a member of the party is very much a networking opportunity – in the way one would join a business association.
Elliott Zaagman argues that this is a system that demands loyalty.
“There is no separation from the party and the state,” he says.
“The system in China encourages the lack of transparency in companies like Huawei.”
The worry is that these close links mean that if the Communist Party asked a company to do something, they would have no choice but to comply.
And if that company is one that is involved in sensitive global telecoms infrastructure projects, it’s easy to see why Western observers would be worried.
There is no evidence to indicate that Huawei is in any way under the orders of the Chinese government, or that Beijing has any plans to dictate business plans and strategy at Huawei – particularly when it comes to spying.
But the way in which the Chinese Communist Party has robustly defended Huawei has raised questions about how independent the company is of its influence.
For example, Beijing stated that Ms Meng’s detention was a rights abuse .
And while her extradition case to the US was moving forward, China detained two Canadian citizens and accused them of stealing state secrets. Critics say the detentions are linked to Ms Meng’s arrest.
December 2018: Chinese police patrol outside Canada’s embassy in Beijing
While not commenting on the arrest of the Canadians, Ren says China’s defence of Huawei is understandable.
“It is the Chinese government’s duty to protect its people,” he says. “If the US attempts to gain competitive edge by undermining China’s most outstanding hi-tech talent, then it is understandable if the Chinese government, in turn, protects its hi-tech companies.”
Over the past few years, there have been signs of a bigger push by the government to get private companies, and in particular tech firms, to cooperate with party rules – even when they are firmly resistant.
A Didi Chuxing logo adorns a building in Hangzhou, China
China’s ride-hailing giant Didi Chuxing’s troubles are an example of the struggles Chinese firms face when they try to uphold their independence in the face of government pressure.
Chinese attitudes to data collection and data privacy are different to those in the West – many people don’t care if businesses have access to their data, arguing that it adds to the convenience of life and work.
Government access to data in China is not the free-for-all that many outside of China assume it to be
Samm Sacks, CSIS
So it wasn’t unusual when, after the murders of two of its passengers by Didi drivers, regulators used the scandal to force Didi to share more corporate data with the government. But Didi resisted – citing customer privacy. Under Chinese law, it had no choice but to comply.
When it did, it handed over “three boxes of data printed on paper, including 95 hard copies for authorities to review”.
According to Samm Sacks of the Center for Strategic and International Studies (CSIS), the case demonstrates that “government access to data in China is not the free-for-all that many outside China assume it to be”.
She says this indicates that there appears to be “a kind of tug of war between the government and companies over data”.
How this plays out will determine how Chinese companies are viewed by foreign governments when they do business overseas.
Companies like Huawei have grown up in a system where to survive and thrive they needed strong links to the Chinese government – there was and is no other choice. But these links could harm their reputation abroad.
“It’s two different systems,” says Zaagman. “Think of it like an electrical outlet. China’s plug doesn’t fit in to the outlets we have in the West.”
What’s at stake
“Basically you want to connect to everything that can be connected.”
Zhu Peiying, head of Huawei’s 5G wireless labs, is showing off devices that can connect to the new technology. From a smart toothbrush that collects data about how well you brush your teeth, to a smart cup that reminds you when you should drink some water, this is a world where everything you can think of is being measured and analysed.
At its most sophisticated, everything in entire cities would be connected – driverless cars, the temperature of buildings, the speed of public transport – the list is endless.
Huawei is thought to be a year ahead of its competitors in terms of its technological expertise and what it can offer customers, according to industry sources.
It’s also thought that the company can offer prices that are about 10% cheaper than its competitors, although critics claim this is because of state support.
Ren dismisses this, saying that Huawei doesn’t receive government subsidies.
He says the real reason behind the US resistance to Huawei is its superior technology.
“There’s no way the US can crush us,” he says. “The world needs Huawei because we are more advanced. Even if they persuade more countries not to use us temporarily we could just scale things down a bit.”
Many analysts say that Huawei’s exclusion from US networks could actually cause the US to fall behind in its 5G capabilities.
“It would mean we wouldn’t be able to participate in any blended network [using Huawei] in Europe or Asia,” says Samm Sacks of CSIS. “That would put us at a significant disadvantage.”
What this would mean in reality is a world of two internets – or what analysts are calling a “digital iron curtain” – dividing the world into parts that do business with Chinese companies like Huawei, and those that don’t.
Because of US pressure on its allies, Huawei has been on an aggressive public relations campaign to win over customers and government stakeholders.
In recent days, Vodafone’s boss Nick Read called on the US to share any evidence it has about Huawei, while Andrus Ansip, the European Commission’s vice president for the digital single market, said in a tweet that he had met with Huawei’s rotating CEO to discuss the importance of being open and transparent, as they explored ways of working together.
But suspicions about Huawei remain.
One security firm reports a sharp rise in inquiries by Asian government clients about Huawei.
“Some have asked us how much they should worry about whether Huawei is really a liability,” says an analyst who consults to Asian governments, on condition of anonymity.
Ren is sanguine about such concerns.
“For countries who believe in them [suspicions about Huawei] we will hold off,” he says. “For countries who feel Huawei is trustworthy, we may move a little faster. The world is so big. We can’t walk across every corner of it.”
But this is about more than just one company or one CEO and his family.
Increasingly, this is perceived as a battle between two world orders, and which one is the future.
In the early days of China opening up, US presidents like George HW Bush espoused the merits of engagement.
“No nation on Earth has discovered a way to import the world’s goods and services while stopping foreign ideas at the border,” he said in a 1991 speech. “Just as the democratic idea has transformed nations on every continent, so, too, change will inevitably come to China.”
1989: George HW Bush in Beijing – he encouraged economic engagement with China
Previous US administrations believed that economic engagement in China would lead to China following a freer, more “liberal” path.
There’s no denying China has made remarkable strides in the past 40 years. The economy grew by an annual average of 10% for three decades, helping to lift 800 million people out of poverty. It is now the second-largest economy in the world, only surpassed by the US.
Some estimates put China’s economy ahead of America’s by 2030.
It achieved this while maintaining one-party rule and the supremacy of the Communist Party.
But its success has raised concerns that it is only possible with a huge amount of government control over the country’s companies. The fear is that control could be used to achieve the Communist Party’s goals – which are at this point unclear.
“It’s a double-edged sword for China,” says Danielle Cave. “[Because of its laws] the Chinese Communist Party has made it virtually impossible for Chinese companies to expand without attracting understandable and legitimate suspicion.”
Added to this, China has become more authoritarian under Xi Jinping’s rule.
President Xi Jinping
“Xi is systematically undermining virtually every feature that made China so distinct and helped it work so well in the past,” writes Jonathan Tepperman, editor in chief of Foreign Policy.
“His efforts may boost his own power and prestige in the short term and reduce some forms of corruption. On balance, however, Xi’s campaign will have disastrous long-term consequences for his country and the world.”
But Ren dismisses this, insisting that China is more open than ever before.
“If this meeting took place 30 years ago,” he says of our interview, “it would have been very dangerous for me. Today, I can be straightforward when answering difficult questions. This shows that China has a more open political environment.”
Still, Ren is hopeful of the direction China will take in the future.
“China has more or less tried to close itself off from the outside world for 5,000 years,” he says. “Yet we had found ourselves poor, lagging behind other nations. It was only in the past 30 years since Deng Xiaoping opened China’s doors to the world that China has become more prosperous. Therefore, China must continue to move forward on the path of reform and opening-up.”
In one of Huawei’s vast campus sites across Shenzen, lies a man-made lake. Swimming in these serene waters are two black swans.
There is a story that Ren put the birds here to remind employees of “black swan” events – unpredictable and catastrophic financial eventualities that are impossible to prepare for. He dismisses this as an urban myth, but it’s hard not to read something into it.
For Huawei, and Ren, these are highly uncertain times with no way of telling what lies ahead.
The founder of Huawei has said there is “no way the US can crush” the company, in an exclusive interview with the BBC.
Ren Zhengfei described the arrest of his daughter Meng Wanzhou, the company’s chief financial officer, as politically motivated.
The US is pursuing criminal charges against Huawei and Ms Meng, including money laundering, bank fraud and stealing trade secrets.
Huawei denies any wrongdoing.
Mr Ren spoke to the BBC’s Karishma Vaswani in his first international broadcast interview since Ms Meng was arrested – and dismissed the pressure from the US.
“There’s no way the US can crush us,” he said. “The world cannot leave us because we are more advanced. Even if they persuade more countries not to use us temporarily, we can always scale things down a bit.”
However, he acknowledged that the potential loss of custom could have a significant impact.
Last week, US Secretary of State Mike Pompeo warned the country’s allies against using Huawei technology, saying it would make it more difficult for Washington to “partner alongside them”.
Australia, New Zealand, and the US have already banned or blocked Huawei from supplying equipment for their future 5G mobile broadband networks, while Canada is reviewing whether the company’s products present a serious security threat.
Mr Ren warned that “the world cannot leave us because we are more advanced”.
“If the lights go out in the West, the East will still shine. And if the North goes dark, there is still the South. America doesn’t represent the world. America only represents a portion of the world.”
Many of the UK’s mobile companies, including Vodafone, EE and Three, are working with Huawei to develop their 5G networks.
They are awaiting a government review, due in March or April, that will decide whether they can use Huawei technology.
Commenting on the possibility of a UK ban, Mr Ren said Huawei “won’t withdraw our investment because of this. We will continue to invest in the UK.
“We still trust in the UK, and we hope that the UK will trust us even more.
“We will invest even more in the UK. Because if the US doesn’t trust us, then we will shift our investment from the US to the UK on an even bigger scale.”
Image copyrightGETTY IMAGESImage captionHuawei has denied that it poses any risk to the UK or any other country
What does Mr Ren think about his daughter’s arrest?
Mr Ren’s daughter Meng Wanzhou, Huawei’s chief financial officer, was arrested on 1 December in Vancouver at the request of the US, and is expected to be the subject of a formal extradition request.
The first covers claims Huawei hid business links to Iran – which is subject to US trade sanctions. The second includes the charge of attempted theft of trade secrets.
Mr Ren was clear in his opposition to the US accusations.
“Firstly, I object to what the US has done. This kind of politically motivated act is not acceptable.
“The US likes to sanction others, whenever there’s an issue, they’ll use such combative methods.
“We object to this. But now that we’ve gone down this path, we’ll let the courts settle it.”
Image copyrightREUTERSImage captionMeng Wanzhou was arrested in Vancouver last December
What did Mr Ren say about Chinese government spying?
Huawei, which is China’s largest private company, has been under scrutiny for its links to the Chinese government – with the US and others expressing concern its technology could be used by China’s security services to spy.
Under Chinese law, firms are compelled to “support, co-operate with and collaborate in national intelligence work”.
But Mr Ren said that allowing spying was a risk he wouldn’t take.
“The Chinese government has already clearly said that it won’t install any backdoors. And we won’t install backdoors either.
“We’re not going to risk the disgust of our country and of our customers all over the world, because of something like this.
“Our company will never undertake any spying activities. If we have any such actions, then I’ll shut the company down.”
Is Huawei part of the Chinese state?
Analysis – Karishma Vaswani, BBC Asia business correspondent – Shenzhen
For a man known as reclusive and secretive, Ren Zhengfei seemed confident in the conviction that the business he’s built for the last 30 years can withstand the scrutiny from Western governments.
Mr Ren is right: the US makes up only a fraction of his overall business.
But where I saw his mood change was when I asked him about his links to the Chinese military and the government.
He refused to be drawn into a conversation, saying only that these were not facts, simply allegations.
Still, some signs of close links between Mr Ren and the government were revealed during the course of our interview.
He also confirmed that there is a Communist Party committee in Huawei, but he said this is what all companies – foreign or domestic – operating in China must have in order to abide by the law.
CHINDIA ALERT: You'll be living in their world, very soon 