Archive for ‘McKinsey’

31/05/2020

India coronavirus: Why is India reopening amid a spike in cases?

A rush of people and motorists in a marketplace area as shops start opening in the city under specific guidelines, on May 20, 2020 in Jammu, IndiaImage copyright GETTY IMAGES
Image caption Within a week of reopening, India has seen a sharp spike in cases

India is roaring – rather than inching – back to life amid a record spike in Covid-19 infections. The BBC’s Aparna Alluri finds out why.

On Saturday, India’s government announced plans to end a national lockdown that began on 25 March.

This was expected – the roads, and even the skies, have been busy for the last 10 days since restrictions started to ease for the first time in two months. Many businesses and workplaces are already open, construction has re-started, markets are crowded and parks are filling up. Soon, hotels, restaurants, malls, places of worship, schools and colleges will also reopen.

But the pandemic continues to rage. When India went into lockdown, it had reported 519 confirmed cases and 10 deaths. Now, its case tally has crossed 173,000, with 4,971 deaths. It added nearly 8,000 new cases on Saturday alone – the latest in a slew of record single-day spikes.

A worker cleans the mascot of fast-food company McDonald's for the reopening of the outlet in Hyderabad on May 20.Image copyright GETTY IMAGES
Image caption Fast food chains like McDonald’s have begun reopening outlets in parts of India.

So, why the rush to reopen?

The lockdown is simply unaffordable

“It’s certainly time to lift the lockdown,” says Gautam Menon, a professor and researcher on models of infectious diseases.

“Beyond a point, it’s hard to sustain a lockdown that has gone on for so long – economically, socially and psychologically.”

From day one, India’s lockdown came at a huge cost, especially since so many of its people live on a daily wage or close to it. It put food supply chains at risk, cost millions their livelihood, and throttled every kind of business – from car manufacturers to high-end fashion to the corner shop selling tobacco. As the economy sputtered and unemployment rose, India’s growth forecast tumbled to a 30-year-low.

Raghuram Rajan, an economist and former central bank governor, said at the end of April that the country needed to open up quickly, and any further lockdowns would be “devastating”.

The opinion is shared by global consultant Mckinsey, whose report from earlier this month said India’s economy must be “managed alongside persistent infection risks”.

Passengers maintaining social distance as they are on board in a DTC Bus after government eased lockdown restriction, at AIIMS on May 20, 2020 in New Delhi, India.Image copyright GETTY IMAGES
Image caption As restrictions ease, Indians are slowly getting used to the new normal

“The original purpose of the lockdowns was to delay the spike so we can put health services and systems in place, so we are able handle the spike [when it comes],” says Dr N Devadasan, a public health expert. “That objective, to a large extent, has been met.”

In the last two months, India has turned stadia, schools and even train coaches into quarantine centres, added and expanded Covid-19 wards in hospitals, and ramped up testing as well as production of protective gear. While grave challenges remain and shortages persist, the consensus seems to be that the government has bought as much time as possible.

“We have used the lockdown period to prepare ourselves… Now is the time to revive the economy,” Delhi Chief Minister Arvind Kejriwal said last week.

The silver lining

For weeks, India’s relatively low Covid-19 numbers baffled experts everywhere. Despite the dense population, disease burden and underfunded public hospitals, there was no deluge of infections or fatalities. Low testing rates explain the former, but not the latter.

In fact, India made global headlines not for its caseload but for its botched handling of the lockdown – millions of informal workers, largely migrants, were left jobless overnight. Scared and unsure, many tried to return home, often desperate enough to walk, cycle or hitchhike across hundreds of kilometres.

Perhaps the choice – between a virus that didn’t appear to be wreaking havoc yet, and a lockdown that certainly was – seemed obvious to the government.

But that is changing quickly as cases shoot up. “I suspect we will keep finding more and more cases, but they will mostly be asymptomatic or will have mild symptoms,” Dr Devadasan says.

The hope – which is also encouraging the government to reopen – is that most of India’s undetected infections are not severe enough to require hospitalisation. And so far, except in Mumbai city, there has been no dearth of hospital beds.

India’s Covid-19 data is spotty and sparse, but what it does have suggests that it hasn’t been as badly hit by the virus as some other countries.

The government, for instance, has been touting India’s mortality rate as a silver lining – at nearly 3%, it’s among the lowest in the world.

But some are unconvinced by that. Dr Jacob John, a prominent virologist, says India has never had, and still doesn’t have, a robust system for recording deaths – in his view, the government is certainly missing Covid-19 deaths because they have no way of knowing of every fatality.

A woman jogs at Lodhi Garden after the local government eased restrictions imposed as a preventive measure against the spread of the COVID-19 coronavirus in New Delhi on May 21, 2020.Image copyright GETTY IMAGES
Image caption Indians are venturing out again but it’s unclear how many of them are asymptomatic.

And, he says, “what we must aim for is flattening the mortality curve, not necessarily the epidemic curve”.

Dr John, like several other experts, also predicts a peak in July or August, and believes the country is reopening so quickly because the “government realised the futility of such leaky lockdowns”.

A shift in strategy

So is the government gearing up for another lockdown when the peak comes?

While Dr Menon believes the lockdown was well-timed, he says it was too focused on cases coming from abroad.

“There was a hope that by controlling that, we could prevent epidemic spread, but how effective was our screening [at airports]?”

Now, he adds, is the time for “localised lockdowns”.

Media caption Coronavirus: Death and despair for migrants on Indian roads

The federal government has left it to states to decide where, how and to what extent to lift the lockdown as the virus’ progression varies wildly across India.

Maharashtra alone accounts for more than a third of India’s active cases. Add Tamil Nadu, Gujarat and Delhi, and that makes up 67% of the national total.

But other states – such as Bihar – are already seeing a sharp uptick as migrant workers return home.

“Initially, most of your cases were in the cities,” Dr Devadasan says. “But we kept the migrant workers in cities and didn’t allow them to go home. Now, we are sending them back. We have facilitated transporting the virus from urban areas to rural areas.”

While the government has said how many infections have been avoided – up to 300,000 – and lives saved – up to 71,000 – by the lockdown, there is no indication of what lies ahead.

There is only advice: The day the government began to ease restrictions, Mr Kejriwal tweeted, urging people to “follow discipline and control the coronavirus disease” as it was their “responsibility”.

The famous Paranthe wali gali (bylane of fried bread) in Chandni Chowk, on August 20, 2014 in New Delhi, India.Image copyright GETTY IMAGES
Image caption Social distancing will prove to be India’s biggest post-lockdown challenge

Because the alternative – of curfews and constant policing – is unsustainable.

“My worry is more the circumstances of people – it’s not as though they have an option to practise social distancing,” Dr Menon says.

And they don’t – not in joint family homes or one-room hovels packed together in slums, not in crowded markets or busy streets where jostling is second nature, or in temples, mosques, weddings or religious processions where more is always merrier.

The overwhelming message is that the virus is here to stay, and we have to learn to live with it – and the only way to do that, it appears, is to let people live with it.

Source: The BBC

06/03/2019

Huawei: The story of a controversial company

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

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

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

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

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

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

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

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

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

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

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

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

 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

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 

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.

Source: The BBC

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