April 12, 2019, Shenzhen, China
Ren: It's a great pleasure for me to be with you here today.
Time: Fantastic. I know you've given a lot of interviews recently. I don't want to go over the same questions again, but unfortunately, we have to hear you in your own words answering some questions. I know it would be quite familiar to you. But please bear with us and we'll try to make it a bit more interesting this time.
Ren: You can be very direct or even very tough in bringing up your questions and I will be very honest in giving you my answers. I sometimes feel like the veil of mystery has been lifted from Huawei, but some people just refuse to believe us. I trust that if we continue to communicate like this, they will get to understand us eventually.
I have spent last week touring your campus and meeting a lot of your colleagues. And this has been a great experience and it's very impressive.
Q1: You just posted your annual revenue of 107 billion US dollars and Huawei has been growing every year since you founded the company. How big can Huawei get? What's your goal in mind?
Ren: It is not the size of the business that we are after. We aspire to provide good services to all. We're just concerned that technological advancement cannot keep pace with people's ever-evolving needs. The communications world is migrating to the cloud step by step. Now, there are many small clouds spreading all over the world. In the future, all these small clouds will be connected to form a huge, global cloud. What matters most to Huawei is whether we have the ability to serve that global market. Therefore, we invest a lot into future-oriented scientific research. We're trying to explore some of the new scientific discoveries and technological inventions, and preparing to invent products that can better adapt to future needs.
As you know, over the last 500 years or so, China has not made significant contributions to the world in terms of scientific and technological invention and discovery. We hope we can make a difference now as it migrates to the cloud. To achieve this, we have brought a large number of scientists onboard at Huawei. At the same time, we also support outside scientists and college professors from around the world, helping them explore the future. What we are doing now aims to address the needs of humanity. It's not all about the balance sheet. As we work with universities, we adopt principles similar to how investment works according to the US's Bayh-Dole Act. That means we provide funds, but the research findings belong to the professors, not Huawei.
Q2: At the moment, just as what you have said, China is lagging behind in technology and striving to catch up with the West. It seems that 5G is the moment where China has overtaken the West and is pioneering new technology. Do you think this is the new normal now that China will always be ahead of the West?
Ren: That's impossible. China has to learn from and catch up with the West when it comes to basic education, including education in elementary schools and middle schools, especially in rural areas. Higher education institutions should focus on academic research, like scientists do. Doctoral papers should be full of insight. We must lay a solid foundation in this aspect. So the better time for us to discuss the question you've just raised would probably be 50 to 60 years or even 100 years from now. The West has creative approaches to all different types of education, ranging from elementary education to higher education, but China still takes a unified approach: exams. With this approach, it's difficult for geniuses to emerge in China.
For that reason, I think it's unlikely that China can catch up with the West within a short period of time in every regard of science and technology. That's why we've been calling for the Chinese government to pay more attention to education, and to change its status as an underdeveloped country and a follower. Children should think independently. We also hope China can make technological contributions to the world in the future.
5G is only a tool. Its value and role have been exaggerated. We don't think the contribution that 5G will make to society will be as enormous as some people have imagined.
Q3: I learned that Huawei filed the largest number of patents last year worldwide. But the US still accuses Huawei of stealing intellectual property, and in fact, of having a bonus system for employees who steal intellectual property. Has Huawei ever stolen intellectual property?
Ren: First, Huawei highly respects intellectual property rights; otherwise, we would have disappeared because our intellectual property may have been stolen by others.
Second, Huawei has done a lot to drive IPR protection in China. Our annual R&D investment is between 15 billion and 20 billion US dollars. Our R&D competence centers are scattered around the world, and we have around 80,000 R&D employees. We are already a leading player. That is not something you can achieve by stealing from others. Individual employees will be punished for their wrongdoings, and they do not represent Huawei.
Q4: Regarding these allegations by the US, do you think they are doing this because they want to use Huawei as leverage to get a better trade deal with the Beijing government?
Have you felt as though you are being used as a pawn? Do you think it's unfair?
Ren: I just wonder, is Huawei that valuable? I don't think the company is so valuable as to play a role in China-US negotiations. We are like a small tomato stuck between the two countries.
Q5: Your daughter was arrested in Canada and is expected to be extradited to the US. There are very serious charges against her, do you fear for her safety?
Ren: All charges must be based on fact and substantiated with evidence. Then, with open, transparent, fair, and just legal proceedings, we will know whether or not we actually have a problem. We don't think there will be any problem as long as everything is made public. We still place our faith in the courts.
Q6: Do you believe the charges against her are politically motivated?
Ren: Maybe. I don't know for sure what those people who started this were thinking, so I can only guess.
I imagine you are in constant contact with Meng Wanzhou and you speak to her a lot. How is she doing?
Ren: She has been busy these days, taking six online courses. She hopes to get a PhD in Canada. Her mother is with her right now and has often told me that Wanzhou is always busy and in good mood.
What about her children, your grandchildren? How are they coping with the estrangement?
Ren: They are still young, so they don't necessarily understand what is really going on. They can definitely feel that their mother is going through something tough. Whenever they have a break from school, they fly to Canada to be with their mother.
Q7: At the moment, the US government has banned Huawei from its infrastructure. Why do you think is this? What do you think lie behind?
Ren: I don't know their motives, but it doesn't matter much to Huawei if we aren't present in the US market. We haven't ever really been present in the US market.
It seems at the moment you're speaking to a lot of American media, trying to convince America that Huawei products are safe and that Huawei is a legitimate company, so you must want to be present in America.
Ren: No, we don't want to enter or serve the US market. The US is taking us too seriously. So we hope that through these dialogues, we can reveal the truth and better understand each other. Whether we can establish our presence in the US market is not that important to us, because even without the US market, we have already become the world's number one. So, we are not in dire need of building our presence in the US market.
By having dialogues with the US media outlets, we want to dispel misconceptions about Huawei. For example, your understanding of Huawei must have changed after visiting us. You are welcome to visit our top labs. I think you'll see how our scientists lead the world.
Actually, scientists and entrepreneurs in the US know Huawei pretty well. I have spoken with them quite a lot recently, and we will further our cooperation with each other. But US politicians do not know much about Huawei. So, what we can do is give them a better idea of Huawei through media coverage. If they only rely on their imagination and don't come to visit Huawei, it will be hard for them to understand what Huawei is truly like.
As I said earlier, some US scientists and companies know Huawei pretty well. So I think maybe US politicians should talk to US scientists and companies more, so that they can have a better understanding of Huawei.
Q8: You said it doesn't matter for Huawei if America doesn't buy Huawei products because you are already number one. But for America, Huawei's 5G is by far the most advanced in the world. Do you think that the American government is doing the American people a disservice by not investing in Huawei because of the benefits 5G could bring for the American economy? I mean, do you think that the American government is doing the American people a disservice because Huawei has the potential to aid the American economy and industry with this 5G?
Ren: I think collaboration for shared success is vital in today's world. Working together to reinforce each other will lead to shared success. The US has remained open over the last 200-plus years, which is the fundamental reason the US has risen from a small country to the most powerful nation in the world.
Openness is conducive to economic development, and globalization is in the interest of the US. If the US government comes up with policies that ban the sale of certain things to certain countries, American companies will make less money, which will affect the US economy.
Therefore, openness is the best policy for the US, and China must learn from the US to become more open to the outside world. Otherwise, the Chinese economy will not be able to continue developing.
Deng Xiaoping is great primarily because he opened China's doors to the outside world – doors that had remained closed for roughly 5,000 years. Because of him, China has seen initial prosperity after just 40 years' efforts.People of my generation experienced a period when China was closed off from the world. The ideal we had back then was not to wear fancy clothes. We just wanted enough food for ourselves. Things are totally different today. We are more than able to feed ourselves, and we even have a lot of meat to eat. This is the progress that China has made, and we should take notice.
In addition, China has made substantial political progress. For example, 30 to 40 years ago, it was simply impossible to have face-to-face interviews like the one we are having now. If I ran into you on the street, I would immediately turn around and run away because talking with you would be a political risk.
Now, we're having this face-to-face interview, and I've talked to many other media outlets. Many of them are concerned that I may get a phone call from Beijing telling me I have said something wrong, but I haven't received such calls. That shows the political progress that China has made. I think this is progress that people should acknowledge.
I believe China and the US must enhance their collaboration in order to achieve shared success. China is a market of 1.3 billion people, while the US has advanced science and technology. If these two come together, it will form an engine that can drive the world economy forward and take the world out of its current difficult situation.
If I had an opportunity to talk to the leadership of the Chinese government, my only suggestion to them would be that China should become more open.
So the government would take your phone call if you want to contact them? Ren: Perhaps, but I don't have their phone numbers.
Q9: The American government accuses Huawei technology of having backdoors which can be exploited by the Chinese government. You said before that you'd rather disband the company than betray your customers. But would you be willing to go to jail to challenge the Chinese government if they made a demand?
Ren: I have said this in the past, and my position remains the same today. If any country identified a malicious backdoor in Huawei's devices, our business in over 170 countries would be severely impacted, and our revenue would decline sharply. By then, all our employees would have left Huawei. They could start their own businesses with their technical know-how and other capabilities. But I would have to stay. I think having to repay tens of billions in bank loans on my own would be more miserable than death. Comparatively, I think going to jail is a better option.
When I first expressed this position, I had not heard anything in response from the Chinese government. 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 always requires Chinese firms to abide by international rules and the laws and regulations of the countries where they operate. He also pointed out that China has no law requiring companies to install "backdoors" or collect foreign intelligence. Premier Li Keqiang then further reiterated that position at a press conference held after a recent session of the National People's Congress. I believe that they, as top government leaders, accurately represent China's position. Recently, when Premier Li Keqiang visited our booth in the "16+1 Summit" in Dubrovnik, he repeatedly told us not to install backdoors.
Now, Huawei is pushing for the signing of a no-backdoor and no-spy agreement with multiple governments. It is also our suggestion that there should be a unified global rule or agreement barring all telecom operators and equipment vendors from installing backdoors. However, it might take a while for the whole world to agree on this. From Huawei's point of view, we're ready to push the Chinese government to sign a no-backdoor and no-spy agreement with any other willing government. In light of this, I'm sure you understand why I'm not concerned about going to jail.
Q10: Yet, just last month, Huawei's Chief Legal Officer Song Liuping publicly acknowledged that Chinese laws may require companies to respond to government requests for assistance and help against terrorism and criminal activities. If such a request was made, would you feel obliged to hand over information even if you were not sure of the charges or the premises?
Ren: The information would not be coming from Huawei. It would come from the networks owned by the public security authorities. This has nothing to do with us.
But how do the public security authorities have access to Huawei's technology, the data?
Ren: They wouldn't access Huawei's systems. They would get the data from their public security systems, the systems supported by telecom operators. All governments of sovereign states have the power of governance within their states.
Q11: Has the Chinese government ever made a request to you for confidential customer information?
Ren: No, not even once. The networks are owned by telecom operators and the states. Huawei is just an equipment provider. We don't have any authority or ability to do anything on the networks.
When something goes wrong with network equipment and a telecom operator's in-house engineers cannot deal with it, they ask Huawei for maintenance. However, we can only work on equipment after we have obtained approval from the telecom operator. And after the work is done, we need to return all of the data to the telecom operator.
Q12: I understand that the UK government is working with Huawei to assess the security of Huawei's systems. Huawei handed over all source code to the UK government for examination. The UK government has not found any backdoors at all, but has found some bugs and glitches in Huawei's software. Does that concern you?
Ren: I think that technologies are always evolving. We are only human. We can never be perfect. Rather, we just keep getting better. It's normal for them to find areas that we need to improve. We are not saying that our equipment is perfect. We are just saying there is no malicious issue with our equipment.
Q13: You come from a military background. How does that influence the way that you run your company?
Ren: I was a low-ranking engineer when I was with the military. And I had no managerial experience there. I started as a technician and was kind of promoted to engineer. If I know a thing or two about the military, I probably learned from the Internet. I studied West Point and biographies of American generals. I would compare the differences in the way that American generals and former Soviet Union generals managed their militaries, and try to take some inspiration and apply what I've learned to Huawei.
Because I was in such a low-level position when I was in the military and didn't gain much experience there, I learned most of what I know about the military from the Internet. I'm a person who does not have many hobbies. Besides coming to work and revising our corporate documents, I do some reading, I surf the Internet, and I even spend some time on a video app called Douyin, known as TikTok outside China.
Q14: No. Oh. TikTok. So, some of Huawei's earliest contracts were with the Chinese military and the Chinese government. I mean, how important were they to the success of Huawei during the early days?
Ren: First of all, we have never relied on contracts with the Chinese government or military for our development. Our contracts are signed with Chinese telecom operators. Those operators are not the government. What's worth noting is that in our early days, our equipment was not that advanced, so we could only sell it to rural areas. We couldn't even manage to make county-wide sales.
Through a dozen years of effort and despite tremendous difficulties since our founding, we managed to establish a presence in the telecom operator market. That's when we started to sell in China's county-level cities.
Q15: Today, Huawei is number one in the world. I'm just wondering what is Huawei's role in the Chinese government's "Made in China 2025" strategy?
Ren: Huawei does not play a very big role in China's "Made in China 2025" strategy. We are just continuing to follow our own path. I think maybe the "Made in China 2025" initiative has a similar purpose to Germany's Industry 4.0 – to expedite the national industrialization process. However, there's a big gap between China and Germany in terms of industrialization.
In China, a significant portion of industry is still based on manual work, so the first step is to move from labor-intensive manual work to mechanization. The next step following that is automation, and then the adoption of information technology. Only after all these steps are completed can we talk about China being on the same track as Industry 4.0.
Currently, a lot of our industry is still not automated. "Made in China 2025" is just giving Chinese companies a new direction. Most of our equipment used in our production lines is from Germany and Japan. Our software is from Siemens, Bosch, and Dassault. Many master's and doctorate degree holders are working on our production lines, operating them, doing research, and improving the way our production lines work. We have basically achieved semi-AI-empowerment on our production lines.
Q16: But it seems that the Chinese government seems to treat Huawei with great importance. And after your daughter Meng Wanzhou was arrested, about a dozen of Canadians were arrested in response, while China also banned Canadian imports of canola. This can be seen as a cooling of the relationship between the countries. Can you see why, from the outside, it might seem that the Chinese government and Huawei are closely linked?
Ren: I don't know why people have this association or what it means. What I do know is that Meng Wanzhou has not committed any crime in Canada or the US. Arresting Wanzhou isn't the right move. However, I think it is right for the Chinese government to provide consular protection to its citizen. She is an executive of a large company and was arrested for no reason.
But don't you think that it is counterproductive for Huawei, because of the image it sets out, if people are extra-judicially detained, in response?
Ren: I don't know the specifics of the cases you mentioned. I only know what's going on with Huawei. I don't think I am able to explain.
The US is the most advanced nation when it comes to science and technology. The country has enjoyed absolute leadership over the last several decades in this area. And in the next several decades to come, the US will continue to enjoy relative leadership. I think the US should be more confident in the fact that Huawei is like a small rabbit, without the capacity to disrupt any industry. Therefore, they should be friendlier to Huawei and treat us fairly.
Since I was young, I have been a fan of the United States. Here today, I remain a fan of the United States. If you carefully read through the corporate documents I have issued over the last several decades, you will find that they are full of American spirit. I think some US politicians may be wrong if they are trying to find leverage. The way Huawei has grown in China – a socialist country – is more to do with what I call "employee capitalism", because we distribute our capital to our employees. So we're facilitating the integration of different things and reducing confrontation. Why is this facilitator now becoming a target of the US?
Q17: Do you consider yourself a socialist?
Ren: Let's not look at socialism and capitalism as purely political systems. To me, socialism and capitalism are just wealth distribution systems. Socialism is about distributing wealth based on how much labor one put in and their contributions. Those who contribute more will get more. Capitalism is about distributing wealth based on the size of your investment.
For example, if we were dockhands and I could only carry one bag while you could carry three, then your income should be three times of mine. There would be a 200% gap. But, in capitalism, if you invested 10 billion dollars while I invested 500,000 dollars, and our profit margin was both 10%, then you would earn 1 billion dollars and I'll only earn 50,000 dollars. This gap exists because capital has no life and can grow exponentially. That's how the income gap has widened.
At Huawei, we believe that those who contribute more should get paid more. We have a hierarchical distribution curve. I believe that income disparity shouldn't be too significant. That's why Deng Xiaoping proposed that China develop a socialist market economy. Socialism emphasizes equity, while market economies allow for differences. Top contributors deserve to be rewarded more, but disparity should not be too significant as I just said. There should be a balance. Why didn't socialism work in the past? The answer is because many people understood equity as egalitarianism. Deng Xiaoping also proposed that China had only achieved the initial stage of socialism. What did he mean by the initial stage? He meant that we acknowledged the existence of income disparity. Deng was also famous for saying, "Let some people get rich first and they need to help those who are left behind get rich as well." Deng's theory is actually somewhat similar to Protestantism, don't you think? Catholicism was always focused on communal obligation, but Martin Luther's reform allowed individuals to stand on their own, leading to 500 years of prosperity in the West.
Q18: The Chinese government recently gave you an award to remark the 40 Years of opening and reform, and I believe you turned it down. Can you let us know why?
Ren: Do you think becoming famous means anything to me? Do you think I'm the kind of person who wants to be famous? I'm a person dedicated to my work. If I had accepted the award, I would have had to attend a lot of events, socializing with different people outside Huawei. And I would have been given honors by governments at all levels. Then I would have no time to revise corporate documents. I would rather focus on how to turn Huawei into a better company. That's a more practical thing for me to do. What's wrong with letting someone else have the glory?
I'm a person who doesn't care so much about the past. I have won some honorary titles, but I have lost almost all of them. I haven't even kept a single memento. I just keep pressing forward. I don't want to stop and accept an award. If I were the kind of person that liked to accept awards, I would have accepted a lot. If I had a lot of medals to show off, would that mean I'm a capable person? Would that mean I could make better 5G technologies?
Are you a member of the Communist Party?
Ren: Yes, I am.
Do you think it's strange because you try to distance yourself from the government a lot. And you say that you turned down these awards and you want to concentrate on the company. So why are you a member of the Communist Party?
Ren: Being a Party member does not mean you have to accept those awards. As long as you have faith and attend some learning sessions, you can become a Party member. If being a Party member meant you had to accept some medals, how much metal would China need to produce enough medals for all the 80 million Party members?
Q19: Do you not see that other countries or customers abroad might feel concerned that you have split loyalties to the party and also to your company?
Ren: I do have a sense of loyalty, but it is to my customers. As for the Communist Party of China, their loyalty is to the Chinese people. But again, my loyalty is to my customers. I don't think there is a conflict.
Q20: Your campus here is really magnificent. There are all kinds of architectural styles. Did you plan all of this? Where does the impetus and inspiration for Huawei's amazing campus come from?
Ren: We run an international open tender process for construction projects. Architects from around the world participate in the bidding process. Our Capital Construction Department reviews those tenders and selects a winner.
For example, the architect for our Songshan Lake campus is a Japanese man named Takashi Okamoto. He got his Bachelor's, Master's, and PhD degrees in the US, yet he does not speak English. But he's a genius. He's great at drawing, and he won the bid for the Songshan Lake project. That's how the campus came to look like what it is today.
The Japanese was educated in America but made a campus recalling Europe. That is very interesting.
Ren: Yes, indeed. I think he is here at Songshan Lake today. If you want to talk with him, I can arrange for that. You guys can talk and have a dinner together.
That's very kind. Thank you.
Q21: At the moment, America has a President who says quite aggressive things about China, accuses China of stealing American jobs and this kind of thing. What is your opinion about President Trump?
Ren: I think that by saying these things, President Trump is reminding the Chinese government that China needs to really deal with their own things. Otherwise, it might end up being defeated by others. We need to pay attention to our own development.
It sounds like you're siding with President Trump over the Chinese government.
Ren: President Trump is pushing us to change. Isn't that good?
Q22: At the moment, there seems to be a split between America and Australia and Japan which don't allow Huawei technology and most countries who still allow Huawei technology. Do you fear that, with 5G, technologies across the world might be split, bifurcated, and then there'll be two separate systems which might have trouble communicating and dealing with each other?
Ren: I think we have seen many twists and turns throughout human history. Look at the old rail system. We used to have wide tracks, standard tracks, and narrow tracks. That significantly added to the challenges and difficulties for world trade. But, even if trains moved slowly, the impact on world trade was not that significant. And historically, we also had different standards for communications equipment. Even up to 4G, we are still using three different types of standards. That adds to the costs of telecom operators and also consumers. That's why we're seeing a greater desire across the world to have unified standards. They bring down cost, speed up connectivity, and provide better services to people around the world. We already have unified standards for 5G. This is not something as simple as politicians drawing a line through the middle and saying we have two different versions. If that's the case, I think the end result would be much higher costs.
Our current unified 5G standards are the result of 10 years of hard work from hundreds of thousands of scientists and engineers around the world. Because of this, I don't think these standards will be reversed so easily.
Q23: You said earlier that you think the impact of 5G has been overblown. Given how much money and energy Huawei has invested in 5G, that seems a bit of a strange statement.
Ren: You know, we have too much money. If we don't invest in the future, we could only distribute it to our employees. Then they will become overweight. In that case, how can they move fast? So we choose to invest in the future. If we priced our equipment too low, that would destroy society. It would cause disasters to Western companies. If we price our products relatively high, we leave space for other companies to survive. Once we make high profits, maybe higher than what we need, we take some to support university professors and scientists in better exploring the future. As we work with universities, we adopt principles similar to how investment works according to the US's Bayh-Dole Act. That means we provide funds, but the research findings belong to the professors, not Huawei.
Q24: You mentioned you liked TikTok before. I was wondering how transformative you think artificial intelligence will be in the telecom industry and for society in general?Ren: I think AI is going to play an extremely important role, not only in the telecom industry, but in society as a whole. Production will become highly intelligent, which could substantially increase productivity. For example, if tractors were powered by AI, they could work 24/7. AI can work even in harsh or tough environments.
AI will also greatly enrich the material and mental wealth of humanity. Therefore, I think all countries must take AI very seriously. Right now, the US is in the leading position in the AI domain.
A lot of people worry that, you know, AI will come along and take human jobs and therefore it will cause social and political unrest. Do you have any of those fears?
Ren: I think this is just the imagination of sociologists, politicians, or writers who don't know that much about AI. Scientists strive to use AI to improve productivity, optimize the way people work, and enrich the material and mental wealth of humanity.
I don't know whether you have toured our production lines. There are not many people working there, but I would say that they are only partially powered by AI. In the future, efficiency will be significantly higher. We would only need five or six people to run one production line.
Western countries face some social problems, including high salaries, high social welfare, and union strikes, which have caused some setbacks in the West in regard to industrialization over the past 20 to 30 years. Some industries have even been relocated to countries where workers are not so overprotected.
Future production models will require fewer people than we do today. I think the West will once again be able to fully utilize its strengths. If an AI-powered robot can do the work of 10 people, then the US will develop into an even greater industrial power, with a workforce equivalent to 3 billion people.
So how do you foresee the society of the future in 50 or 100 years' time, people will not be working in industrialized manufacturing anymore and it will just be AI? How do you foresee the future?
Ren: Some people will continue to work, and those people will be extremely highly paid. Other people can live happily without having to go to work. Therefore, if people want to work in the future, they have to study hard and keep pace with the times. I think that would be better for society.
Q25: Would we have to reform the tax system to provide those people that couldn't find work or didn't want to work?
Ren: Changing tax law is the job of the government. I don't know how. The Chinese government takes Huawei seriously because we pay nearly 20 billion US dollars in taxes around the world every year. Tax payment used to be in the charge of Meng Wanzhou. The US authorities might have thought that we wouldn't be able to pay our taxes without her. But that is not the case. We are a company that runs according to rules and processes. Even though she is not here, our company is still running quite well.
That's probably why you're allowed to say what you want and you don't get a phone call from Beijing?
Ren: Nothing I say is false! Why would they give me a phone call? Do you think anything I've said so far was not true?
Q: No, certainly not.
Q26: There was one Huawei employee arrested in Poland and charged with spying. I was just wondering what your response is to these allegations.
Ren: It is our corporate policy that all of our employees must not violate local laws and regulations. If they do, we will not go easy on them.
So, you admit that this employee was doing something untoward on behalf of another power?
Ren: We don't know what that person did. But we are supportive of what the government of Poland has done since it is their legitimate right.
We work to ensure compliance, both internally and externally. Internally, we have put effective oversight in place. We are also ready to be subject to external oversight.
We absolutely cannot allow our employees to do whatever they want. If we allowed that, Huawei would have fallen apart long ago.