Huawei’s Board Member and Senior Vice President Catherine Chen: In Canada we trust

On the afternoon of March 5, 2019, Huawei board member and senior vice president Catherine Chen gave an exclusive interview to Saša Petricic, a reporter from CBC. Below is the transcript of the interview.

Q1: I want to ask you about something that is on the minds of a lot of Canadians, the situation with Meng Wanzhou. When she was arrested, were you surprised?

Catherine Chen: Yes, I was shocked. I could not believe it. I'd been working with Meng Wanzhou at Huawei for around 25 years. We are friends, not just co-workers. I know her very well.

When we first joined the company, we were still young women in our 20s. Meng Wanzhou is extremely hard working and reads a lot. When we attend meetings together, I often see her taking advantage of any available time or short breaks to draft documents or even memorize some English vocabulary.

After the arrest, my son told me about something – last year, he was applying to a university and had a question about finance, so he texted Ms. Meng. Much to his surprise, she replied right away. Meng Wanzhou is a very kind and warm-hearted woman. She is always willing to help, even if it is just something minor.

I also respect her professionalism. She has led Huawei's financial management transformation. Through that program, she helped to improve resource allocation efficiency, operational efficiency, and internal controls. She easily ranks as one of the best CFOs of any Fortune Global 100 company.

I was heartbroken when I heard about what she has been through and how her rights were so seriously infringed upon when she was detained in the Vancouver International Airport. Meng Wanzhou is strong and optimistic, and that motivates me and others at Huawei not to be too consumed by emotion. We have to face the situation head-on. We are opposed to the actions taken by the US government. It is just so rare to see a company executive being arrested just based on charges against her company. 

At the same time, we need to take an objective and rational approach, and we should count on the law to address this issue. We are against the actions taken by the US government. I see it as an abuse of the judicial process. We believe that the Canadian government is fair, competent, and independent. Huawei believes that the justice system in Canada can make a just, fair, and transparent decision.

Q2: You seem to have more confidence in it than the Chinese government does. Why is that? In the Canadian justice system, you were talking about how fair it is. It sounds like you have more confidence in the Canadian justice system than the Chinese government has. Why is that?

Catherine Chen: Sorry, I haven't made that comparison. Do you think I seem to be more confident?

Question: Yes, because the Chinese government has basically said that all of this is being politically influenced. They've said it in so many words that the justice system is not being allowed to operate independently in Canada. You seem to have faith in it. I'm just curious, why do you have so much more faith in it?

Catherine Chen: Well, I agree with the point that this case is politically motivated. President Trump has commented on this issue. So have some Canadian diplomats. Their comments have proven that this case is politically motivated. What's more, in Canada, who can we count on except the justice system? We believe that the court will ultimately reach a fair and just conclusion.

Q3: Maybe we can go back to Meng Wanzhou. You said you're trying to look at this and what will happen and how it needs to be done in a rational and objective manner. Can you do that? It's also obviously something that is very emotional for you.

Catherine Chen: As a woman, of course I am very emotional about this sometimes, and sympathize deeply with what she has been through. As a professional woman, she has suddenly had to face this difficult situation, so it must be very hard for her. She has four children – three sons and one daughter, the youngest. I can only imagine how much she is missing her family.

So yes, this topic touches me emotionally, but I can still think rationally.

Question: Have you had a chance to speak to her since she was arrested?

Catherine Chen: We have talked, but not very frequently. When we spoke, I could feel her strength and optimism. I have never asked her just how she made it as far as she has, but I do admire her.

Question: And do you think she will pull through this? I mean, do you think she has the strength to pull through this, from what you know of her?

Catherine Chen: We must have that confidence.

Q4: Do you think she's being used as a scapegoat? Do you think that people are using her not because she did something wrong but because she's being used as a symbol of something?

Catherine Chen: Well, I know what kind of person Meng Wanzhou is, and so I firmly believe that she didn't do anything wrong. I don't know whether she is being used as a scapegoat or not. But President Trump had said something similar.

You must have seen the news on Sunday that Meng Wanzhou, through her lawyer, filed a civil suit against members of the Royal Canadian Mounted Police, the Canada Border Services Agency, and the Canadian government. I admire her courage and the legal action she is taking to defend her legitimate rights and interests.

Q5: Okay. So, what would you say to the Canadian government about how she needs to be treated?

Catherine Chen: I hope that the Canadian government will remain open and transparent during the process, and we are confident of this. As this case proceeds, we also hope the Canadian government will ensure its law enforcement process remains public and disclose more details related to the case as they become available.

Huawei's 5G Is Actually Canada's Homegrown Technology

Q6: I wanted to ask about 5G. What is Huawei's special expertise in 5G? It has become not only because of what it has said but what others have said. It seems to have identified itself in some ways with 5G networks. Why is that? Why is 5G and Huawei so special together?

Catherine Chen: Huawei began 5G research in 2009, and has since invested a total of 2 billion US dollars in this area. To date, Huawei holds more than 2,500 5G patents, has secured over 30 5G commercial contracts, and has shipped more than 40,000 5G base stations.

These numbers may sound a bit boring, but let me use one example to illustrate my point. Many telecom operators say they choose Huawei's 5G equipment because it is cost-effective. Why? Because we have better technology innovations. Huawei's 5G base stations are compact and light. It only takes one person to install a 5G base station, so you don't need cranes or extra human resources or to shut down a road to install a base station. According to our estimation, the installation of one Huawei 5G base station in Canada can save around 10,000 US dollars.

Why do we say 5G technology is more secure? Back with 3G and 4G, we identified many scenarios that carried potential risk. So when we began our 5G research, we put a lot of effort into developing standards and technologies that mitigate these risks. For example, we encrypt data during transmission, so that it can resist attacks even from quantum computers. We also encrypt personal identity information, which fends off rogue base stations and prevents user location data from being intercepted.

Some consumers might ask why they need these new technologies. The answer is because new technologies deliver better experiences. For example, they will be able to download higher-definition pictures faster and enjoy VR without feeling dizzy. Under extreme work conditions, they could use remote controlled devices instead of risking their lives.

Huawei's 5G has strong ties to Canada. Though our 5G R&D team is spread across many countries, including Germany, the UK, and China, our two team leaders are Canadians – one gentleman, and one lady, both holding PhDs. That's why our Canadian colleagues often say that Huawei's 5G is actually Canada's homegrown technology.

Our 5G R&D efforts started in Canada. In addition, we have developed customized solutions for Canada. For example, in northern Canada, if we use satellites to cover the region, network quality and signals can be very poor. If we use fiber, the cost would be very high, so we came up with the solution we call 5G Air Fiber. It can provide superior, high-quality home broadband service, known as WTTx, at one-third of the cost of other solutions. Of course, this solution is not only applicable to Canada; it can also be used in other remote areas, as well as developed regions that are vast and sparsely populated.

Q7: Huawei has put a lot of effort into these technologies and has been working on things before some other people were even thinking about 5G. What happens? What is the risk if, as we have heard around the world, there is pressure on countries and networks not to adopt or not to use Huawei? What happens if that actually comes about? What happens if people, countries decide, other countries like some of the ones that have talked about it, that they don't want to use Huawei? What happens then to your business?

Catherine Chen: The US government has taken a series of actions that have interfered with Huawei's normal business operations. It is quite rare to see this kind of action any place around the world. But around the world, Huawei has the most 5G commercial contracts, the most 5G rollouts, and the highest level of technological maturity. I believe people are hoping to deploy and use the most advanced technology as soon as possible.

I'm not very concerned because I believe every country, government, company, and consumer will make the choices that are in their best interest.

Q8: But some countries have made choices and they've decided to exclude Huawei. Australia is an example, and the United States, perhaps others as a question mark in some other places. Surely that's a risk, no?

Catherine Chen: Actually, only two countries, the United States and Australia, have decided against using Huawei. However, things are different in Canada and many other countries. Our products and services serve three billion people around the world, and we have maintained a strong track record in security over the past 30 years.

The operators who have been working with Huawei have decades of expertise, which allows them to select the equipment vendor that provides the most secure and advanced products, and suits them best. I believe they will continue to use Huawei. So I'm not too concerned about the issue you have mentioned.

Q9: We know that this question is not entirely a technical one. It's not just a question of the engineers making these decisions. In many cases, it's the politicians making these decisions. Does that not make you afraid at all? The United States is and has been putting a lot of pressure on its allies not to adopt Huawei technology. Canada, for instance, has not made a final decision about whether Huawei will have the contracts for 5G. Are you afraid at all that this becomes political and it doesn't matter what the engineers say?

Catherine Chen: I'm not afraid about this, but it is very rare to see such actions taken by the US government. My view is that the US may have underestimated the unity and strong will of Huawei. In addition, the US government may have underestimated that countries across the world, including their governments, companies, and people, would make their own judgments. The US has presented no facts. They only have opinions and speculations. They try to use them to influence public opinion, and I think they may have overestimated the level of influence they have.

Speaking of Canada, Huawei has 1,100 employees there, and we plan to create another 200 jobs in 2019. In addition to providing network products and services, we also invest heavily in R&D in Canada. We have invested a total of 500 million US dollars in R&D in Canada over the past ten years and invested 137 million dollars in 2018 alone. We also sponsor research programs of Canadian universities.

We have worked with Telus and Bell for more than 10 years, and we have adopted a government-led Security Review Program (SRP) to ensure the security of wireless networks used by Canadians. This program is intended to ensure that people in Canada can enjoy secure network services and products. This is a promise we have made and to which we will remain committed.

You raised an excellent point about this question not being an entirely technical one. If we purely treat cyber security as a technical issue, then it becomes a simple question and is easy to solve.

Q10: So why are they so afraid of you?

Catherine Chen: I have no idea why a government as big as the United States is afraid of a company as small as Huawei. Should a company be feared just because they have great technology? I don't think that kind of reason stands very strongly. It's like how in the NBA, there are mainly American basketball teams, but Canada's Toronto Raptors also play very well. In terms of tech companies, there are American companies, European companies, Canadian companies, and so on. Why can't there be a Chinese company?

Q11: One of the specific things that are raised by the US government and by others has been the question of Huawei's relationship with the Chinese government. They feel that it's too close. They feel that there's too much influence by the government and by the Communist Party on Huawei. And in particular, they point to this one National Intelligence Act, which they say would compel Huawei to hand over information that passes through its networks. What do you say to that?

Catherine Chen: I have read about those concerns. I understand those concerns. I also felt shocked and concerned when I first read about the CLOUD Act from the US and Australia's Assistance and Access Bill. These laws require companies to install backdoors and collect data from foreign countries.

Under the circumstances, what we can do is have every employee, including our founder Mr. Ren, make a legally binding promise that we will refuse any request from any government to install backdoors or collect information. This is our pledge.

Q12: Let me just ask on that, how can you do that? Because you're in China, you're operating under Chinese law. One of your commitments, when we toured the cyber security lab yesterday, was that you always follow the laws of the countries that you operate in. So if the Chinese government says this is the law and it comes to you and says you have to provide this information, how can you refuse?

Catherine Chen: I've talked about our stance on this. Now I would like to talk about our actions. The first action we will take is to bolster our cyber security capabilities. Last month, we announced that we would make an initial investment of 2 billion US dollars in improving our software engineering capability and the security and trustworthiness of our products.

In addition, cyber security capabilities should be subject to high standards and transparent third-party scrutiny. Our cyber security capabilities have passed stringent tests from the Security Review Program (SRP) in Canada, the HCSEC Oversight Board in the UK, and our testing center in Bonn, Germany. Those are government-led tests and verifications. Huawei has also undergone evaluations by independent third parties, such as Cigital from the US. Among all participating companies, Huawei's performance was found to be above average across all 12 key cyber security indicators, and ranked the highest in 9 out of the 12 indicators.

Next, I would like to address the Chinese law you brought up. Huawei has consulted legal experts to carefully assess that law. Furthermore, the Chinese government has made statements clarifying it on many occasions. For example, Yang Jiechi, the Director of the Office of the Foreign Affairs Commission of the Communist Party of China Central Committee, explained this issue very clearly at the Munich Security Conference. On two occasions, spokespersons of the Ministry of Foreign Affairs of China clarified this. And a couple of days ago, a spokesperson for the National People's Congress made it very clear that there is no law in China requiring companies to install backdoors or collect data or intelligence from other countries.

We have never received any such requests from the Chinese government. In the future, even if we do receive such a request, we will reject it, whether it's from the Chinese government or another country's government. There is no reason we can't do this.

Q13: But it's not out of the question. I mean that I have spoken to experts as well that says that the law at best is ambiguous and it's not clear whether in fact, companies or individuals would have to pass over information. It seems to read like it would regardless of what other people have said in terms of interpretation. How can you be so sure that you would be able to resist the Chinese government? Other corporations, other CEOs have not been able to, on other issues. Why would Huawei be able to?

Catherine Chen: We have consulted with legal experts on this. China's Criminal Law stipulates that "any act that no explicit stipulation of law deems a crime is not to be convicted or given punishment". Since it is not a requirement explicitly stipulated in the law, we can reject such requests.

Moreover, I would like to make it clear that Huawei is only an equipment vendor. It is telecom operators, not Huawei, that are responsible for networks and customer data.

Let me give you an analogy. Ensuring cyber security is like playing hockey. On a hockey team, the centermen, wingers, defensemen, and goalie must all work closely together to win a game. It's not a one-man show, and everyone must follow the same rules. No matter how good one player is, he cannot be the whole team. It's the same when it comes to cyber security.

The idea that ensuring cyber security is the responsibility of one single company or one single role is absolutely wrong. All players in the ecosystem, including governments, equipment vendors, telecom operators, and users, have their own role to play and must work closely together to ensure cyber security. We should not overestimate the role or the threat of a single player in the ecosystem.

Q14: You're using hockey analogies. You must be Canadian.

Catherine Chen: My son has a lot of hobbies, he likes the NBA, hockey, and rap music, so I've picked up quite a bit from him. He introduced me to the music of Canadian rapper Drake. I like Drake a lot. I particularly like one of his songs, the one that says "Started from the bottom, now we're here". This line really speaks to what Huawei has been through all these years. Huawei was built from scratch, with only a few founding members. Now, we have around 97,000 shareholding employees. They are like the partners of the company. They invest money in the company.

Last year, Huawei invested around 15 billion US dollars in R&D, which makes Huawei the fifth largest R&D investor in the world. Our goal is to connect the entire world. We have achieved this in many ways. I think what we've done is terrific.

We pride ourselves on our willingness to do what others are unwilling to do. We are committed to building networks and ensuring stable network operations in the most challenging environments and at the most critical moments. Every employee is making every effort to work for their ideal and for a better life.

Q15: Right. You talk about Huawei's way of doing things. One of the legal accusations from the United States is that Huawei's employees were stealing secrets from other companies. What do you say to that?

Catherine Chen: Huawei has already released an official statement regarding this. We deny these allegations, and we believe that the US courts will eventually conclude that these allegations are unfounded.

Because the legal proceedings for this case are already underway, I'm not in a position to talk about the details of the case. However, what the US government did has greatly damaged Huawei's reputation, so we will definitely take actions to defend our reputation, including legal action if necessary.

For example, last week, I wrote an open letter to the US media, inviting them to come and see what Huawei is truly like. All of our executives will be willing to answer any questions from them. We will host technology launches and open our R&D labs to demonstrate our technologies. In doing this, we want everyone, including the media, technology specialists, viewers, readers, and listeners, to come and see the real Huawei with their own eyes, and make their own judgments about who has the most advanced technology.

Q16: If certain employees did do something like this or have been involved in this, either in this case or in other cases, what would Huawei's reaction to that be? For instance, since this case came to light and since these charges were laid, have you reiterated to employees what the company policy is on stealing technology secrets from other companies? Have you cracked down on them?

Catherine Chen: Huawei has very clear corporate policies and processes in this regard. We have many education programs in place. But more importantly, if any employee goes against these rules, we would not hesitate to take appropriate action. We have done so in the past, and will continue to do so in the future.

Q17: And has it reiterated the message, though? Obviously, this has been in all of the headlines. Have you reiterated the message to employees that, "It is just in case you don't understand, you are not allowed to steal things from other companies", since those charges were filed?

Catherine Chen: This has nothing to do with the cases or allegations. With or without them, we have been reiterating the message, and we also have a clear policy for regularly improving employee awareness in this regard.