June 27, 2019
Q1 Thank you very much for your time today. I'd like to start by asking a few questions, just about recent news. Can you help me understand what is happening with FedEx and the Huawei packages? Is there anything special in these packages? They said that this was an operational error. Do you believe that?
Ren: Each year, we ship over 100 billion US dollars in goods to different destinations across the world through logistics service providers such as DHL and FedEx. All of these goods are normal goods. There's nothing to hide about them. As for why FedEx delivered packages destined for another country to the US, we have no idea. Only FedEx can tell us what really happened.
Q2 Can you explain what you're doing with Futurewei in the US? You've said many times that you have no intention of splitting off part of the company, but isn't that in fact what you're doing with Futurewei? Can we expect to see more of this sort of thing in the future?
Ren: According to the US sanctions rules, as long as a component or technology contains US elements, it will be subject to US sanctions. Work involving Americans may also be considered to contain US components. So, Futurewei is a special case that was designed to meet the US's legal requirements.
Is that one way for you to solve other problems for Huawei in the future? To divide up parts of the company and locate them in different places around the world?
Ren: No. I don't think there is any other country in the world that would adopt this Entity List practice that the US does. So we won't duplicate the Futurewei model in other countries.
Q3 You've said that Huawei does not cooperate with the military on research, but we learned today that a series of people have co-authored research papers with the Chinese military, and identified themselves as working for Huawei. Does this not prove that Huawei cooperates with the military in China on research?
Ren: Huawei has no research partnerships with the military at an organizational level. These few people must have acted on their own, in their own interests. We are not aware of why they chose to do this. You can speak to them directly and ask them why they did this.
Do they still work at Huawei? Will they be fired?
Ren: As far as I know, there is only one person who is still working at Huawei. All the other people had left Huawei some time ago.
And will that one person be fired?
Ren: I don't know. I don't know anything about this person at all. He is too many ranks below me.
What would be your message to other employees? Would you say, "Don't do this"? Would you warn other employees to say, "This is not allowed for Huawei employees"?
Ren: Our products are only for civilian use. If someone works on anything for other purposes, it may affect their performance appraisals. At Huawei, we require every employee to contribute to our core business. If someone has made contributions elsewhere, how can they receive recognition from their departments?
Is military research cooperation allowed for a Huawei employee or not allowed?
Ren: It's not allowed.
Q4 You have a number of your most important suppliers, such as Google, Arm, and others, who have been lobbying very hard for exceptions from the US entity listing so they can continue supplying you. What is your expectation for that process? Do you still plan on a sort of complete ban for the US cooperation with Huawei? Or do you expect some of your key suppliers to be given exceptions?
Ren: It's understandable that our US suppliers are actively lobbying the US government in the hopes of being exempted from this ban. Such lobbying efforts are in their own best interests. Likewise, Huawei needs to buy huge quantities of products and technologies from these companies.
Unfortunately, I don't think the US will remove us from the Entity List. They have added Huawei to the list not because we have done something wrong and need to be punished, but because they want to destroy us. If someone wants to condemn you, they can always trump up a charge. That's why I think the US won't let up in the short term.
So you don't expect any of your key suppliers to gain exceptions as they've been asking for? That's not what you're planning for at this moment?
Ren: I'm not saying that they won't be successful. I just said that their efforts are completely understandable. We're not worried about the impact of the Entity List, and there are three major reasons why I feel this way:
First, our team is more united than ever. Before President Trump launched his attacks against Huawei, our team was getting sloppy. But because of the attacks, our team has become more united in working towards our goal to survive and thrive. We're becoming stronger-willed, and we are working with increased drive and passion.
Second, we are creating a united front with our partners. We aren't angry with any of those US suppliers who can't continue to supply us. We understand, and we want to cooperate with them whenever it's possible. We will open our arms to embrace cooperation with more companies, no matter if they're Chinese or non-Chinese. We will enhance cooperation with any company that is willing to support us. As the Chinese saying goes, "A just cause attracts much support, an unjust cause finds little." This is how we are building a united front.
Third, we are still moving in the right general direction. The US has been attacking our 5G, but 5G is only part of our network connectivity business. Huawei is a global 5G leader. We are also well ahead of others in the optical transmission, optical switching, access network, and core network domains. In this industry, we can continue to develop by relying on our own chips and software, so we aren't affected by the US move at all.
The impact on our consumer business is relatively larger. By adjusting to the new environment over the next one or two years, our consumer business will be able to continue growing.
Despite the impact of the Entity List, we sold 10 million of our new P30 series of smartphones within 85 days of the launch. This shows our customers' trust hasn't declined. As of May 30, we had sold 100 million mobile phones. I believe we can gradually resolve the difficulties our consumer business is facing in the second half of this year or sometime next year.
Q5 You said "adjusting ourselves to the new environment", you figure that in one or two years you will have fully adjusted to the new environment. Can you help me understand what "fully adjusted" means? Does that mean at that point you will have the ability to produce all of your products without relying on American technology or American patents, et cetera?
Ren: We have many patents and so does the US. We have signed cross-licensing agreements with US companies for many patents, and there are no issues with cross-licensing. We would never want to live without the support of US technologies, components, and products. With US technologies and components, Huawei products will be more advanced and better serve humanity.
By saying that we will adjust ourselves to the new environment in the next one or two years, I mean that we won't be struggling to survive after that period.
Can you help me understand why that is? What will have changed between what you do now and two years down the road?
Ren: Through our own efforts and those of our partners, we will have no problems with our supply.
Q6 Earlier this year, you said Huawei would be fine without chips from the US. In mid-May, you said that given some of the issues with the US, it's expected that Huawei's growth may slow, but only slightly. More recently, you've said you expect Huawei's revenue to decline this year by 30 billion US dollars, that's a very significant impact. What's changed? What has become worse than you expected?
Ren: First, we can make all cutting-edge core chips by ourselves, and ensure our products continue to stay far ahead of the industry.
Second, a few components will need to be updated to newer versions. During this transition period, we may find it hard to ensure sufficient capacity. This may have some impact on our development.
Third, people outside Huawei may think 30 billion US dollars is a big number, but it is not to us. We had forecasted that our revenue would reach 135 billion US dollars this year, and if that figure decreases by 30 billion, we will still have about 100 billion US dollars in revenue. This was our initial projection, but the actual numbers in our financial statements were a little higher than expected.
So, 30 billion is no longer the forecast in terms of the impact on revenue this year?
Ren: Yes, maybe less than that.
20 billion? Can you give us a sense? Everybody's caring about numbers.
Ren: I don't know the exact number. I usually exaggerate a bit when I speak, so that we have a bit of a buffer when things change. We have to wait and see the financial statements for the second half of the year. The numbers in the first half of the year can't represent our business performance for the whole year, because we experienced rapid growth in the first four months. The Entity List had some impact on us in May and June, but the impact was not big because the momentum of production continued for some time. Starting from the second half of the year, the impact is expected to become bigger. But I'm not sure how big that impact will be.
Q7 You've got a 90-day reprieve. You're in a temporary reprieve position from the Entity List. But, I mean, presumably you are planning on that reprieve ending when that 90-day period ends. Can you help me understand what happens on that day when this temporary period ends? You said there could be shortages. Where would you see shortages? I mean, what changes? Do we see products no longer available for people to buy? What happens at Huawei on the day of its sort of full entry into this entity list?
Ren: I think the 90-day reprieve was unnecessary in the first place. When Huawei was added to the list, we'd already been well prepared, so we didn't need this 90-day reprieve. As a matter of fact, the 90-day reprieve meant that the scope of the attack against Huawei became larger, not smaller. After Huawei was added to the Entity List, we only faced restricted access to American components and technologies, but with the 90-day reprieve, our engagement with standards organizations, which didn't need permission before, had been restricted. This caused much trouble for many standards organizations. So from our standpoint, this 90-day reprieve was not softening the fall but rather hardening the blow.
I think the US government should remove Huawei from the Entity List instead of postponing its implementation. It's the American companies, not us, that have suffered the most. Huawei's production lines are working flat out. Our workforce has expanded from 188,000 to 194,000 because we need more engineers to work on new versions of our products.
If you have time, you can take a look at our production lines. They are up and running, and the people working on them are staying busy. If US companies can't sell their components to Huawei, their financial reports will reflect it and they'll feel the sting more than we do. We feel sorry for them because we've been working together very closely, in good times and bad, for the past 20 to 30 years. So the 90-day reprieve means nothing to us; we've been prepared for a long time.
Q8 Can you help me understand, the addition of 6,000 people, I mean, that's bigger than most companies. Are those people involved in sort of software development and chip development? What are the specific areas you've been doing the most hiring in?
Ren: They work in many different areas.
Q9 I know a lot of journalists have asked you to identify the specific holes. I don't really want to go there. What are your primary concerns? Is it getting your chip technology free of any US influence?
Ren: People outside Huawei are most concerned about chips, but they're not my number one priority. This is because our chips are already more advanced than American ones. Those less important and less technically sophisticated components that we used to ignore are now becoming increasingly important to us. If one small component is missing from a circuit board, you might have to redesign the entire board and that involves quite a lot of work.
So I don't see the US's Entity List as a threat to our survival. You asked me how many holes there are. I think there are hundreds or even thousands of them. We have to send lots of people to check each and every hole to patch them up.
I know some of this is very technical stuff you probably would not concern yourself, but has any specific, small, unexpected thing reached your desk that has proven to be particularly difficult to resolve from a technology perspective?
Ren: Technically, these holes are easy to fix, but it takes time. Some simple components are actually having a big impact. Say for instance, that the US cut off the supply of three components that we used to ignore, because technically they were easy to make. Every circuit board may need these components though. If they are unavailable to us, we have to redesign all our boards. This would involve a lot of work. Now if these components become available to us, but we have already made one ourselves over the past two months, then we just need to buy two. We have the ability to fix all those holes. We have more than 80,000 people in R&D, and we spend 15 to 20 billion US dollars in R&D every year. We can send our best people, who are conducting research that is critical to our future development, to work on these simple, urgent problems first. That way, we can solve all of our problems.
What have you told people? What deadline have you given to your people in terms of the time when you want Huawei to be able to operate in all areas, like hardware, software, and components, without any reliance on the US?
Ren: I won't set a timeline for them. Different teams have different tasks and workloads. I will let them solve the problems they face themselves. We need to try our best to resolve the issues on our own.
By issues be resolved, you mean that everyone and every component of this company needs to find a way to operate without reliance on the US, am I understanding that correctly?
Q10 There are reports that Huawei is seeking a billion dollars in patent licensing fees from Verizon, is that figure accurate? And what is your view on the total amount of unpaid patent licensing fees that Huawei believes it can collect from US companies?
Ren: We have nearly 90,000 patents, among which over 11,500 standard essential patents were registered and granted in the US. The US has granted us the legal rights to these patents. The US is a country ruled by law, and every US company that is using our patents should pay licensing fees to us. We are negotiating licensing fees with Verizon, and the fees we ask from them are reasonable. They should understand that. We are less aggressive than Qualcomm when it comes to similar negotiations. I think they will pay us the money. I believe the US is a country ruled by law, so US companies will pay the licensing fees. The one billion US dollars is the total fees for using Huawei's patents over the past five years. The fees don't include those for 5G patents. We will also negotiate licensing fees for using our 5G patents in the future.
But one billion is a large number. Given that your company has taken about one and a half billion dollars over the last several years in total in patent licensing fees, one billion is a big increase on that. Do you think that's only a small amount of how much you think you can collect in future years, from unpaid royalty fees of American companies?
Ren: I would say one billion is just a small number. We didn't collect many patent licensing fees from others, because for some organizations we engaged with, they also owned patents that we were using, and we needed to pay them as well. Therefore, the net licensing fees we collected were not that much. But for companies without any patents that we were using, they had to pay more. In general, we are not aggressive when asking for licensing fees, and the fees we ask for are reasonable.
When we look at what you're asking for from Verizon, do we expect to see Huawei's demands from other companies in the US alone, or everywhere, such as in Europe, Canada, and Australia?
Ren: It should be from all markets.
Do you have a sense of how much in total Huawei can collect through that process?
Ren: It would definitely be much less than what Qualcomm asks for.
That's still a very big number.
Q11 Now onto your daughter. Part of the reason I'm here, as a Canadian, I think is probably because Canada and China have entered into a very different phase in their relationship, in part because of the role of your daughter. She's in Vancouver at the moment. How many times have you traveled to Canada over the years? You've been there at least twice, I think. I don't know how many times in total.
Ren: I've been to Canada many times, but I can't recall the exact number. The most important visit I've paid to Canada was in 2017. During that trip, I travelled from coast to coast and spent more than 10 days there. The primary purpose of that visit was to survey Canada's investment environment and I also visited a handful of universities. I think Canadian universities are really outstanding. The three founding fathers of artificial intelligence (AI) are all from Canada. During that visit, we found that there was a remarkable investment environment and planned to place our theoretical research center for North America, or even the entire world, in Canada.
As the US is becoming increasingly closed off from the world, many talented individuals cannot get US visas. I think they may have to work, invest, and attend conferences in Canada instead. We believe the living environment and standards of living in Canada are pretty similar to those of the US. So we plan to significantly expand our research presence and build large R&D centers in Canada, like what we previously did in the US. I've already told the head of our research team in Canada that we will buy land in cities like Toronto, Ottawa, Montreal, and Vancouver, and build our new R&D centers there.
I think the collaboration between Huawei and Canada is in the interests of both sides. Scientists work on theories, but sometimes they don't know how to apply their theories to real-world scenarios. As a company, Huawei clearly understands how theories can be applied commercially, but we are not as good as scientists in terms of theoretical research. So it stands to reason that together, we can create synergy and drive the industry forward.
Through these partnerships with Huawei, professors will be able to teach students knowledge that can be applied in real-world scenarios. These students will not necessarily work for Huawei after graduation. Those who work for other companies can drive innovation in society. Some of our employees may leave Huawei and continue bringing innovation to society. I believe Canada will have its own "Silicon Valley" one day.
Recently, there has been enormous hype about 5G around the world, but to some people in the US, it has been more concerning than an atomic bomb. Actually, the 5G standard originated from a mathematical paper published by a Turkish professor back in 2007. Huawei assigned thousands of our in-house scientists and experts to carry out in-depth studies and analyses of that paper, while other companies in the world also put tens of thousands of scientists and experts. Together, we've turned that paper into a standard for 5G. The Turkish professor didn't realize how his paper could be applied and was amazed to see it developed into a 5G standard.
5G will be a tool for AI in the future. As I just said, all of the three founding fathers of AI are from Canada. They are already prominent leaders in their field. We see no reason why Canada as a country couldn't become the future leader of AI.
If Canada builds strong capabilities in AI, and an AI-powered robot can do the work of 10 people, then the country will become an industrial power with a workforce equivalent to 300 million people. What's Canada's biggest disadvantage? Though its people are brilliant, there aren't a lot of them. This means Canada has no advantages in traditional manufacturing. But with the wide adoption of AI, Canada's strength can be fully leveraged, enabling it to become a big industrial power.
I would like to invite you to take a tour of our production lines. Though we only have a little more than 6,000 technicians in our manufacturing facilities, they support us in generating revenue of more than 100 billion US dollars.
During my 2017 visit to Canada, I met two of the three founding fathers of AI; the other one was not in Canada at that time. Now, both China and the US are making extensive efforts trying to catch up in the area of AI. Given its first-mover advantage, Canada must seize this strategic opportunity. So far, we haven't changed our strategy of making heavy investments in Canada.
I wonder if you can help me understand a little bit more. You've talked about four cities. Has the land already been purchased? Like, how much land? How many people do you envision working in some of these centers?
Ren: We have purchased 500 acres of land in the UK so that we can build an optical chip factory. Our optical chips are produced in the UK and have leading edges worldwide. We plan to build a beautiful campus there, just like the one in Dongguan, in order to attract more talent from across the world.
Canada also has a beautiful environment. Currently, while the US tightens its visa policies for scientists, I think Canada should relax its policies to attract more scientists from other parts of the world. This way, more scientists from the Middle East, Eastern Europe, and other countries and regions will be willing to move to Canada. We will try to recruit such scientists to work on theoretical research in Canada. That's why I stayed in Canada for more than 10 days in 2017.
Can you help me understand the scale of that project? Because you've talked about a big investment. Is that investment worth 100 billion dollars, or 10 billion dollars? You may not have an exact figure, but what scale of investment are you looking at?
Ren: I can only say that these will be large-scale investments. If the current conflicts between Huawei and the US, as well as between Huawei and Canada, had not happened, Canada would have probably become Huawei's global center for theoretical research. Canada has an advantage: It is very close to the US and has similar social and legal systems, as well as a similar living environment to the US. So a lot of talent who cannot go to the US or don't want to stay in the US can go to Canada.
Over the next several decades, I think that the biggest technology evolution will come from AI and bioscience.
Regarding this idea of Canada becoming the global center for Huawei on theoretical research, are you still pursuing that, or has everything that's happened in the last seven months changed that plan?
Ren: The direction remains unchanged, but the pace of implementation of this plan has changed. Still, we will not change our strategy to invest and develop in Canada.
I just want to explain to readers, I mean, what scale? Presumably this is an idea of billions of dollars; is that fair to say?
Ren: At least several billion US dollars. I am quite sure of that.
Q12 There's one thing I want to ask you about your daughter. The first question is for you. Meng Wanzhou obviously had personal ties to Canada. She had property in Canada. Do you have personal ties to Canada? Do you have property or other personal investments in Canada?
Ren: No. My English is not good, so I cannot live in Canada. If I lived there, I wouldn't even be able to go shopping or would get lost when I went out for a drive. So I will continue living in China in the future.
But Meng Wanzhou was obviously a frequent visitor to Canada. Did she go to Canada in October of last year?
Ren: She often traveled. I don't know where she went exactly.
When did Huawei become aware of the US' arrest warrant against Meng Wanzhou?
Ren: She was detained on December 1, and I became aware of this two later days on December 3. She was supposed to go to Argentina to chair an internal meeting. After learning that she was arrested, I flew to Argentina to chair that meeting myself on December 4.
So you're saying no one at Huawei had any idea there was an arrest warrant out for Meng Wanzhou?
Ren: No one knew about this. Otherwise, why would she have gone there just to be put up against the wall like this?
This is my question as well, because every country on that trip that she planned to go to, Argentina, Mexico, Costa Rica, France, has an extradition treaty with the US. Also Australia.
Ren: Some countries were smart and rejected the US request.
What was the smart move back then?
Ren: Canada should not have become involved in this matter. It's the business of the US, and should be taken care of by the US itself. Since Canada has gotten involved, it has suffered and so have we. I feel sorry for what's going on, on both sides.
Q13 I think you've used the term "victim" in the past. Both Huawei and Canada are victims in this matter. But if the Canadians are victims in this matter, there are now two Canadians who have been imprisoned in China: Michael Kovrig and Michael Spavor. If they are also victims in this matter, why has Huawei not lobbied on their behalf? Why has Huawei not demanded the Chinese government release them as well, if they're also victims?
Ren: I understand these are legal actions taken by the Chinese government. We are only a company, and there is not much that we can do. We believe in the legal systems of Canada and the US. Meng Wanzhou has committed no crime, and we believe this case will be resolved through legal means. So we are resorting to legal means, rather than seeking help from the government.
Meng Wanzhou has committed no crime in Canada or anywhere else in the world. Meng Wanzhou's case does not satisfy the double criminality principle, so if the extradition request of the US were approved, it would violate Canadian law.
If Canada releases Meng Wanzhou, this will show Canada is truly a country ruled by law. If Canada only does so after getting permission from the US, I think Canada's image might be harmed. We hope that Canada can independently enforce their own laws and regulations. Meng has not committed any crime in Canada, and the case does not satisfy the double criminality principle of Canada's Extradition Act. Therefore, the extradition proceedings should be called off. Otherwise, this goes against Canada's Extradition Act.
There is a debate in Canada now. In Canada, the Minister of Justice has the power to intervene, at any time, to call off extradition proceedings. And there is a debate in Canada about whether the Canadian Minister of Justice should do that. The former Canadian Prime Minister has said Canada should do this. What is your view?
Ren: I think public opinion on this is correct. Based on judicial investigations, there has been proof that Canadian law enforcement authorities have violated the law while they detained Meng Wanzhou at the airport. I think it would be a proactive, wise, and legitimate move if the Minister called off the extradition proceedings. We don't want Meng Wanzhou's case to affect the relations between our two countries, the relations between our two peoples, or any future opportunities for development.
For me personally, I'm quite open-minded. I don't have any negative views about Canada, despite what has happened to my family. We, as a company, have continued to recruit many more researchers in Canada this year. We are continuing to invest in Canada. We didn't change the normal business plan of our local office there.
I think Meng's case should be addressed through Canadian legal proceedings. I believe right now is probably the best time to settle this issue. Both sides should try to untie this knot. There might be different ways to possibly do this, but I think it may be worthwhile to have the Minister of Justice intervene.
You said again and again that you trust the judicial process, you trust the court to resolve this. Why are you now asking for a political solution here?
Ren: The Minister of Justice can intervene and exercise this power. That's part of Canada's legal system and it's also consistent with Canada's Extradition Act.
Q14 At this point, how do you rate the chances of Canada installing Huawei's 5G technology? What would you put on that?
Ren: I think that's a matter for the Canadian government and Canadian carriers to decide on. It's not up to Huawei. Just like selling clothes at the mall, whether customers buy your clothes depends on their willingness to spend money. We cannot decide for customers. That's beyond our capabilities.
Let me share a story with you. Why did Europe develop faster than China? Several hundred years ago, there were trains and ships in Europe, while China still relied on horse-drawn carriages for transportation. In China, those carriages were definitely slower and carried less cargo, while in Europe, trains ran much faster, and ships could carry even more cargo. Europe had realized industrialized society earlier. So speed is very important to the development of a society. Now, what we are seeing is the transport of information, not of physical goods. The countries that move faster in deploying information technologies will be faster in terms of economic development.
China was very underdeveloped 20 to 30 years ago. Eventually though, it stepped up its efforts to build information systems. This is one of the reasons why China's economy has caught up. 5G is a very high-speed system. When full-fledged 5G networks are in place, per-bit cost for using data traffic will drop dramatically. That will play a very important role in boosting the development of culture, education, and economy, among other things. Certainly, the US cannot set up advanced information systems on its own. That's because we'll not sell any of our 5G products in the US. If Canada can put in place a high-speed information infrastructure, it's very likely investors from other parts of the world will swam to Canada.
If you are interested, you can look at the correlation between changes to data traffic and economic growth over the last 30 years across different countries. Through this comparison, you'll find that countries whose information infrastructure grows faster will also have economies that grow faster.
If you have time in the future, I will get someone to give you detailed information on the example of South Korea. South Korea has taken quite an aggressive approach to ICT development, and their economy has been growing very fast as well. In the future, the US may not have very high-speed networks. If Canada could put in place high-speed ICT infrastructure, I think Canada will have better chances of attracting investors from other parts of the world.
Q15 Three of the people that have been among your most senior employees in Ottawa in recent years, All of them used to work at Nortel, as did a number of the people that work under them today. Did Huawei steal Nortel's technology, and then build up its own business, particularly in Canada, by taking the remaining employees?
Ren: After Nortel collapsed, we recruited those people you just mentioned. Back then, Nortel didn't have the technology we are talking about today; they only had talented people. When such talented people were out of work, it was just natural that they would find other jobs. When Nortel collapsed, 3G had just started developing in the world. As the industry evolved from 3G to 4G, and then to 5G, those people also improved themselves during the process. What they have contributed to Huawei is what they had in their minds. It's definitely not about intellectual property theft.
One of Nortel's greatest contributions was to improve the capacity of optical transmission networks to 10G. Unfortunately, Nortel collapsed because the IT bubble burst. Today our optical transmission networks boast a capacity of 800G. Of course, we need to build on our predecessors' contributions to achieve greater success. However, there's no intellectual property involved in this, and it is essentially our own invention.
I did once want to acquire Nortel, but the deal never happened because of commercial reasons.
How much were you going to pay for Nortel?
Ren: We never got that far. We only talked about the method of acquisition. In 2003, we planned to sell Huawei to Motorola for 10 billion US dollars. But during the very week the deal was supposed to be approved, there was a change in Motorola's board and the new chairman rejected the deal, so the acquisition failed. Several years later, Motorola collapsed. We thought about acquiring Motorola, but was not able to make it happen. It's just one of those missed opportunities in history.
Q16 Do you believe that a technological Cold War is inevitable and that there is a divide between the American influenced world in terms of technology and the Chinese influenced world in terms of technology? Is there no going back from that path at this point in time?
Ren: I don't think this assumption holds. The world must head towards interconnectivity. If an American has to get a new phone in order to make a phone call in China, or if a Chinese person has to get a new phone to make a phone call in the United States, it would move human society backwards.
Moving forward, the information society will only become more interdependent. In particular, as software-defined everything and cloud become more prevalent, things would get rather complicated if the world were divided.
It's neither wise nor realistic for certain politicians to look to divide technology into different camps. For example, if US companies cannot sell components to other countries, those companies will shrink. As a result, the cost of their production will increase and consumers will have to pay more.
The goal of globalization is to allocate resources in an optimal way. The cost of services that people enjoy today is relatively low. If the technology community were divided into two camps, economies would suffer. And I don't think Wall Street would be fond of this idea. People in the US say Wall Street has a very big voice, right?
Q17 I want to ask you a very specific question. You said repeatedly that Meng Wanzhou was not guilty, but one of the pieces of evidence against her in America is a PowerPoint presentation. What is your understanding of how the US received that PowerPoint presentation? Did they receive it through legitimate means? Do you believe that the presentation is a piece of evidence that can be admitted into court?
Ren: The bank was in contact with Huawei from the beginning to the end of the period Skycom was dealing with Iran. They knew about Skycom's business in Iran as well as its relationship with Huawei. That went on for several years. Then the bank invited Meng Wanzhou to a café where she presented several slides and her presentation was not misleading. Why did the bank ask her for the slides? We don't know. We hope that things will be made clear after the trial proceedings have been completed at the US District Court for the Eastern District of New York.
Q18 Huawei has been, in some ways, a pioneer for the Chinese corporate sector in terms of a company, a Chinese headquartered company, a Chinese-origin company that has succeeded internationally. Half of your revenues are from international markets. As you know, there are rules, some of them quite recent in China, that mandate sort of intelligence sharing in China. I don't want to ask about those specific rules because I've read your legal opinions on them. But does the existence of those rules in China make it difficult for any other company, any other Chinese company, to succeed overseas? If there are requirements for intelligence sharing among Chinese companies in China, are they obstacles to the internationalization of the broader Chinese corporate sector? And if so, have you sort of pushed for those rules to be relaxed in China? Should those rules be changed too?
Ren: We don't have the ability to ask for laws to be changed. However, at the Munich Security Conference, Yang Jiechi, a member of the Political Bureau of the Communist Party of China (CPC) Central Committee and Director of the Office of the Foreign Affairs Commission of the CPC Central Committee, made it very clear that the Chinese government never requires companies to install backdoors. Premier Li Keqiang then reiterated this position at a press conference following a recent session of the National People's Congress. Recently, when Premier Li visited our booth at this year's 16+1 Summit in Croatia, he even directly told our staff not to install backdoors. This is testament to their support for us when it comes to never stealing intelligence from other countries or companies. Therefore, we can sign "no-backdoor, no-spy" agreements with any country.