Huawei BOD Chief Secretary Jiang Xisheng's Interview with International Media
On April 25, 2019, Jiang Xisheng, Chief Secretary of Huawei's Board of Directors, was interviewed by multiple international media outlets at Huawei's headquarters in Shenzhen. During the interview, he answered questions about Huawei's ownership structure and governance system. Below is the full transcript of the interview.
Opening remarks by Jiang Xisheng:
Dear members of the media, good morning. We also have some attendees online. Welcome to you all. Before moving to the Q&A session, I would like to give you a brief introduction to Huawei's ownership structure.
First of all, I would like to thank the two American professors who wrote the paper about our ownership structure. Actually, we are having today's interview because of this paper. We want to take this opportunity to clarify our ownership structure.
1. Huawei is wholly owned by its employees. This has been the foundation of our continuous growth over the past 30 years.
This photo may look familiar to you. It was from our annual report. At Huawei, we have more than 90,000 employees holding shares in the company through the Union. Huawei is wholly owned by its employees. No outside organizations or government agencies hold any shares in Huawei.
Because of this Employee Shareholding Scheme, Huawei is owned and controlled by its shareholding employees. That is why we have maintained our independence over the past three decades, allowing us to stick to our strategies.
Real estate has been the most profitable industry in China over the past 10 to 20 years, so many companies decided to get into it. However, Huawei never entered that industry. Several years ago, there was a popular saying in the Internet and ICT industries that everyone has a chance to fly when there is favorable wind blowing from behind. Many companies do whatever they can to seize these chances, like autonomous driving. However, we did not follow suit.
In the ICT industry, the Personal Handy-phone System (PHS) was extremely popular in China around 2000. China had its own 3G standard several years ago. But Huawei remained unaffected by these trends. We stay focused on our core business strategies.
In addition to that, all of Huawei's share capital comes from our employees' own money. Our employees will not allow external influences to compromise their own interests or damage the company's long-term development.
Huawei has no external backing or resources to rely on. The only way we have to achieve growth is through our own hard work and dedication. Employees are highly motivated to perform well, and they push their colleagues and even their managers to work hard, too. They will not tolerate complacency or corruption. Shareholding employees feel obligated to oversee the company's operational compliance.
2. The two independent functions of Huawei's Union: A platform for implementing the Scheme and a trade union as defined by China's Trade Union Law
Now I'd like to talk about Huawei's Union. The Union was established in accordance with China's Trade Union Law. However, our Union also operates independently as a platform through which our Employee Shareholding Scheme is implemented. I would like to clarify three terms.
First is the Union; second, the Trade Union Committee; third, the Representatives' Commission. Huawei's Union is an organization registered under the Shenzhen Federation of Trade Unions. The Trade Union Committee is a management organization elected by the members of the Union in accordance with China's Trade Union Law. The committee members are not appointed by the upper-level trade union. Currently, Huawei's Trade Union Committee has seven members. The Representatives' Commission was established to manage the Union as a platform for implementing our Employee Shareholding Scheme and exercise shareholder rights on behalf of shareholding employees. Members of the Commission are elected by shareholding employees on a one-vote-per-share basis. The Commission currently has 115 members.
Why are these two functions independent? First, there are different management organizations. Second, they have different responsibilities. According to China's Trade Union Law, a trade union is charged with protecting the lawful rights of employees and coordinating labor relations. In addition, the Union will care about employees and address some of the difficulties they encounter in their lives. This is a requirement stipulated in China's Trade Union Law. When Huawei's Union functions as a trade union, it is funded by a proportion of the company's total compensation package. These funds are used to serve employees and carry out Union activities. If the Union was to be liquidated, the residual funds would go to the upper-level trade union.
When Huawei's Union serves as a platform through which the Employee Shareholding Scheme is implemented, the Representatives' Commission is the organization that manages the Union, and fulfills shareholder responsibilities and obligations on behalf of all shareholding employees. This function complies with China's Company Law, and other provisions set by government agencies concerning employee shareholding, including the Provisions of Shenzhen City on Employee Stock Option Plans.
The capital for the Union through which the Employee Shareholding Scheme is implemented is the employees' own money which they contribute. The Union invests the money acquired from employees into Huawei Holding & Investment Co., Ltd. as share capital, to fund the company's long-term growth.
After investing in the Union, shareholding employees are entitled to the company's annual profits. That means the company's profits are distributed to shareholding employees. If the company suffered a financial loss, shares held by the employees would depreciate. If the company went bankrupt or was liquidated or if the Union was liquidated, employee share assets would go to the registered shareholding employees at the time of liquidation, in proportion to the number of shares that they hold.
3. Why are some of the recent online remarks about Huawei's ownership structure simply untrue?
Recently, there have been stories and comments online about Huawei's ownership structure, including the paper written by two professors. Most of these comments are not true or factual. I would like to give some examples.
First, there is a belief that employee shares in Huawei are in fact at most contractual interests in a profit-sharing scheme. As a matter of fact, Huawei employees invest in the company with their own money. They are entitled to profit sharing, but also bear the risk of depreciation. At the same time, shareholding employees elect representatives to exercise shareholder rights on their behalf. So what Huawei is implementing is a shareholding scheme, rather than a profit-sharing scheme.
Another misconception is that Huawei's Union is stated owned, and that Huawei is a state-owned enterprise. This is a misunderstanding. Huawei's Union was established in accordance with China's Trade Union Law while the Employee Shareholding Scheme is managed through the Union in accordance with China's Company Law and the Provisions of Shenzhen City on Employee Stock Option Plans. These two functions are separate and independent from each other, in terms of funding, operations, and liquidation arrangements.
There are also comments out there saying that if the Union is liquidated, its residual assets would go to the upper-level trade union, rather than shareholding employees. This is also not true. As I said earlier, if the company or Union went bankrupt, employee share assets would go to the registered shareholding employees at the time of liquidation.
Some also claim that Mr. Ren Zhengfei has some ultimate veto authority, and he exercises this authority to manage and control the company. This is also a misunderstanding. It is true that Mr. Ren has a veto authority. But he only has veto authority on certain important matters, rather than on all things. He does not have the authority to make decisions on certain important matters. Mr. Ren influences the company by communicating his ideas and sharing his management philosophies. Every few days there is an article explaining Mr. Ren's ideas or speeches. That is his way of managing the company.
I'd also like to share a story with you. A few years ago, Mr. Ren had this white enameled cup that became famous at Huawei. Wherever Mr. Ren visited, this cup would be right there with him, because he gave so many speeches and he just needed water. You won't see that white enameled cup anymore, because our campus is now full of coffee shops and break rooms. That is why I say Mr. Ren influences the company by giving speeches and communicating his ideas.
This is all the information I wanted to share with you before we move on to the Q&A session.
Q1 Yuan Yang, Financial Times: There are three questions. On TianYancha.com, we can see that Huawei Technologies Co., Ltd. is fully owned by Huawei Investment & Holding Co., Ltd. and a little bit over 1% of the latter's shares is owned by Mr. Ren and the remaining 99% is owned by the Trade Union Committee.
So my first question is, what are the differences between the Union and the Trade Union Committee? Why is it not the Union, but the Trade Union Committee, that holds the shares of Huawei Investment & Holding Co., Ltd.?
The second question is, as required by Chinese law, a company cannot have tens of thousands of registered shareholders, but for Huawei's Trade Union Committee, who is the owner of this committee?
And third, who are the employees of Huawei Investment & Holding Co., Ltd.?
Jiang Xisheng: Very good questions.
First, regarding the difference between the Union and Trade Union Committee, the Union is a legal entity and a ground-level organization established and registered according to China's Trade Union Law while the Trade Union Committee is a management organization in the Union. Sometimes these two names are used interchangeably in Chinese documents regarding trade union management. To put it simply, generally speaking, the Union is a legal entity and the Trade Union Committee is a management organization.
Second, about the limitation on shareholder numbers. In China, a limited liability company can have up to 50 registered shareholders. A non-listed stock corporation can have up to 200 registered shareholders. At Huawei, we have way more than 50 or 200 shareholding employees, so they cannot be registered as Huawei's shareholders. This is true for Huawei as a limited liability company. Even if we make our company a stock corporation, it would still be impossible to register all our shareholding employees as shareholders. Because of this, the Union acts as a platform through which our employees can hold shares.
This practice has a legal basis in China. In 2001, the Shenzhen Municipal Government released the Provisions of Shenzhen City on Employee Stock Option Plans. In addition to Huawei, many companies in China had adopted this model early on. As you know, Ping An Group, Vanke, and Lenovo had all used these Unions as a platform for implementing their employee shareholding schemes. Even today, many other companies still register their Union as a shareholder, so they can implement their own employee shareholding schemes.
Third, Huawei Investment & Holding Co., Ltd. is a holding company that has subsidiaries like Huawei Technologies Co., Ltd., which mainly focuses on our ICT business, and Huawei Device Co., Ltd, which mainly focuses on our consumer business. Employees of Huawei Investment & Holding Co., Ltd. mainly perform some general management functions. I myself is an employee of this holding company.
Q2 Carolyn Zhang, New York Times: The previous question was more about the relationship between the Union and the Trade Union Committee. My question is about the relationship between the Trade Union Committee and the Representatives' Commission. The 115 members of the Representatives' Commission are elected by shareholding employees on a one-vote-per-share basis. The governing laws are China's Company Law and the Provisions of Shenzhen City on Employee Stock Option Plans. What is the role of the Trade Union Committee? What is the relationship between the seven-member Trade Union Committee and the Representatives' Commission?
Jiang Xisheng: There is no relationship between these two.
Q3 Arjun Kharpal, CNBC: One of the claims made by the academics is that the actual stock shares the employees have, which they call virtual stock, are essentially a profit sharing scheme. Can you explain the nature of exactly what Huawei employees get and how the pricing of the stock works? Can they trade it? Is it more than just profit sharing?
Jiang Xisheng: I want to make three points. First, why do we call them virtual shares? It is because shareholding employees are not registered as shareholders. They don't directly hold the shares of the company. That's why we call the shares virtual shares. The shares held by the Union actually belong to all shareholding employees.
Second, the company's profits are completely owned by shareholding employees. We can choose not to distribute profits, or choose to distribute some. We can also reserve some profits for future development.
Third, if Huawei suffers losses, the value of its shares will decrease.
The Representatives, who are elected by shareholding employees on a one-vote-per-share basis, exercise shareholder rights on behalf of the shareholding employees.
Under a profit sharing scheme, it would be impossible for employees to exercise such authority. Employees don't have to spend money to buy the shares. They wouldn't suffer losses. And employees would have no right to share in the remaining assets if the company was liquidated. So virtual shares are not a profit sharing scheme.
Regarding the pricing of our virtual shares, the net asset value per share is calculated every year based on our KPMG-audited financial reports, with dividend payout being deducted.
Arjun Kharpal: Can the shares be traded?
Jiang Xisheng: Shareholding employees cannot transfer their shares to others. They can apply to have part of their shares repurchased every year though. If an employee leaves the company, the company purchases their shares back. If certain conditions are met, they can keep their shares even if they leave the company.
Q4 Stephanie Studer, The Economist: From what you described then, it sounds like the Trade Union is established and registered according to the law, as you said. Meanwhile, the trading committee is the governance body. So they're linked and yet distinct. If we know the Trade Union is ultimately answerable to the state, why should we believe that the trading committee is not? How could they be distinct? Can you explain that?
Jiang Xisheng: Huawei's Trade Union Committee is part of the ground-level trade union organization and is operated and managed based on China's Trade Union Law.
As a ground-level union, its basic responsibilities are similar to those of its counterparts found in foreign companies. However, Huawei has also used the Union as a platform to implement its Employee Shareholding Scheme. This function is managed by the Representatives' Commission, and is totally separate and independent from the Trade Union Committee.
So what activities does Huawei's Trade Union Committee engage in? It mainly organizes activities that employees can do in their spare time. For example, there are all kinds of clubs at Huawei for employees who enjoy basketball, badminton, ping pong, jogging, and photography. The Trade Union Committee is mainly responsible for organizing such kind of activities.
Q5 Li Tao, South China Morning Post: You said that Mr. Ren has the power of veto for certain important matters but he does not have decision making power on the matters. Can you clarify which kind of matters Mr. Ren can veto? Do you have specific regulations on those?
Jiang Xisheng: At Huawei, we have regulations for this, which are our Articles of Governance. They clearly define the matters where Mr. Ren can exercise his veto authority, for example, increase in capital, adjustments of capital structure, and amendments to the Articles of Governance and key governance documents, as well as the nomination of candidates for the Board of Directors and the Supervisory Board. Mr. Ren would not use his veto authority unless he has to. The Articles of Governance clearly define the responsibilities, authority, and also the "checks and balances" relationships between the different governance bodies of Huawei, including the Representatives' Commission, the Board of Directors, and the Supervisory Board. I want to say a few more things regarding this. We spent a lot of effort drafting the Articles of Governance and they have been discussed for almost three years. We've learned from many present and past practices as well as from Chinese and foreign practices. We have referred to the practices of the industry, companies, and family businesses, as well as the development processes of some state and political systems. More importantly, the Articles of Governance have been based upon Huawei's own experiences and thoughts over the past three decades, including the management thoughts and philosophies of Mr. Ren.
We also studied carefully the development process and the stability of the US Constitution. We were impressed to see that the US Constitution has remained so stable. There have only been 27 amendments to the US Constitution over the past 200-plus years, which is excellent. I think the stability of the US Constitution over the past 200-plus years may be exactly one of the reasons for the rapid growth of the US.
Q6 Carolyn Zhang, New York Times: Three questions. First, you said that the Trade Union Committee and Representatives' Commission are organizationally separate structures. Then why is the Trade Union Committee a registered shareholder of Huawei, rather than the Representatives' Commission?
Second, you said that the Trade Union Committee and the Representatives' Commission serve different functions. But since the title of the Trade Union Committee includes "trade union", the differences between their functions and relationships are confusing. Why doesn't Huawei choose another solution to avoid such confusion?
Third, you mentioned that Huawei's virtual shares cannot be transferred among Huawei employees and that generally the shares will be bought back by the company if an employee leaves. But when certain conditions are met, employees can continue to hold their shares after leaving the company. Can you clarify under what conditions an employee can continue to hold the shares after leaving the company? Is there any specific regulation or laws that we can refer to for this?
Jiang Xisheng: These are very good questions. Actually, we also want to know why the Representatives' Commission is not allowed to be directly registered as the shareholder of the company.
Currently, China's industry and commerce authorities do not allow excessive numbers of shareholders to be registered for companies. It used to be allowed early on, and back then, there were several options for an Employee Shareholding Scheme.
First, shareholding employee committees could be directly registered as a shareholder of a company.
Second, a trade union could be registered as a shareholder.
Third, you could also set up independent holding companies, or the like.
Later on though, shareholding employee committees were no longer allowed to be registered as a shareholder in the civil affairs system. Even if they had been registered in the civil affairs system, they were still not allowed to be registered as a shareholder with the industry and commerce authorities. Trade unions though, have always been allowed to be registered as a shareholder. We are also not satisfied with this situation, and wonder why we cannot have other solutions. But nobody has told us the answer.
As for whether we can adopt some other solutions instead of the Union, we could need to establish many companies. But it would be very complicated, because a limited liability company can have at most 50 shareholders, and a stock corporation can only have 200.
To factor 200 into 90,000, we would need to establish several hundred companies. However, the law also has a restriction over the total number of subsidiaries a group company can have, no more than 200. So this solution is not feasible, either.
Are there any other solutions? We've looked into them, but those approaches are too complex and very costly. They may also have other legal issues. Therefore, Huawei has chosen to use the Union as the registered shareholder of Huawei. It may be a little difficult to understand, but it is feasible, and we have maintained this structure over the years.
You also asked a question regarding how employees can continue to hold company shares after they leave the company. According to our regulations, they must have worked at Huawei for at least eight years and be at least 45 years old. We have a regulation for this kind of situation. We can show it to you when you visit the Exhibition Hall for Virtual Restricted Shares in the afternoon.
Q7 Yuan Yang, Financial Times: There are three questions from FT. The first one is that Huawei's Trade Union Committee was established according to China's Trade Union Law, and is part of the All-China Federation of Trade Unions. Huawei needs to pay about 2% of its compensation package to the Trade Union Committee, who may submit part of that fund to the upper-level trade union and in the end, to the All-China Federation of Trade Unions. Is this correct? And my question is, does the All-China Federation of Trade Unions have any control or influence over Huawei's Trade Union Committee? Are there any annual audits? Or does the All-China Federation of Trade Unions oversee Huawei's Trade Union Committee?
The second question is, the Trade Union Committee belongs to Huawei Investment & Holding, rather than Huawei Technologies. And most employees of Huawei Investment & Holding, as you mentioned earlier, are managers of Huawei, rather than ordinary employees. Does it mean that the Trade Union Committee is owned by Huawei's management? And there are seven members in the Trade Union Committee. Can you tell us who are they and how were they elected?
The third question is, recently some foreign politicians raised questions about Huawei's ownership structure. Is Huawei planning to make its ownership and capital structure more transparent? Will you release the audits from KPMG or ask KPMG to receive some media interviews in order to enhance the trust in Huawei?
Jiang Xisheng: The company accrues a certain portion of funds from its compensation package and submits it to the Union. The Union uses part of that fund to organize activities and submits another part of it to its upper-level trade union, the Shenzhen Federation of Trade Unions. I'm not clear about the relationship between the Shenzhen Federation of Trade Unions and the upper-level trade unions. Regarding the relationship between the Shenzhen Federation of Trade Unions and Huawei's Union, there are several aspects.
First, as I mentioned, Huawei pays a portion of its compensation package to the Shenzhen Federation of Trade Unions via Huawei's own Union. Huawei's Union is registered under the Shenzhen Federation of Trade Unions, which issues a qualification certificate to Huawei's Union and performs annual audits. There are not many other connections between these two organizations. We do not need to report our business operations to the Shenzhen Federation of Trade Unions, and there is no need for it to check anything else at Huawei.
There's only one union within Huawei – the Union of Huawei Investment & Holding Co., Ltd. How are the members of the Trade Union Committee selected? They are recommended by our departments. The Trade Union Committee is made up of seven members: Yin Xuquan, Li Jinge, Lv Ke, Shi Yanli, Wu Qinming, Tian Feng, and Cao Yi. These names may sound new to you because none of them are members of the board. Yin Xuquan is the Chairman of the Trade Union Committee and Li Jinge is the Deputy Chairman of the Committee. These two are also members of the Supervisory Board. Cao Yi is the head of the Employee Social Club, which is responsible for organizing activities for employees. The rest of the members are managers from different business departments.
Regarding transparency, I think what you've suggested is a very good idea that we can consider. Over the past few years, Huawei has made a lot of effort to increase transparency. Although Huawei is not a public company, we want to disclose more information to allow our customers, suppliers, and consumers to know more about us. There has been a lot going on recently and we do face some pressure both from the media and governments who need to know more about Huawei. Mr. Ren has given many media interviews recently and even people like me who are shy and responsible for internal management are also taking interviews, because we want to be more transparent and let others know more about us.
There is a saying that you can never wake someone up if they only pretend to be asleep. Whatever we say, some may still insist their own opinions. However, we still want to be more transparent to our customers and partners and to the media. We will make our ownership structure more transparent so that others understand our operating mechanism. We welcome you all to visit the Exhibition Hall for Virtual Restricted Shares this afternoon if you haven't visited it yet.
Q8 Raymond Zhong, New York Times: On the issue of transparency, I think what would really help us would be if we could see the Articles on Huawei's Trade Union Committee. Is there any plan to make it public or available? The other question is, if this virtual shareholding scheme is as systemic and organized as it sounds, what would be the trouble in converting it to a public shareholding scheme? I understand that Huawei doesn't want to go public, but is there any legal or technical reason why it would be difficult to convert the virtual shares into proper shares?
Jiang Xisheng: Huawei's Trade Union Committee doesn't have its own Articles, because there is no such requirement by law. But you have raised a good recommendation for us to consider. Regarding the Employee Shareholding Scheme, we do have regulations on this.
We have reiterated that Huawei has no intention to go public. Even if Huawei wanted to go public, we would have to first address the restrictions that, according to law, set the maximum number of shareholders at 200. Without addressing that first, it would be impossible for us to go public.
I want to use China's Ping An Group as an example. When Ping An went public, its trade union was not registered as a shareholder due to the restrictions on the number of shareholders. The capital held by the shareholding employees through the trade union was not transferred to the upper-level trade union. It was still held by the employees.
Q9 Dan Strumpf, Wall Street Journal: You described earlier Huawei shareholding scheme as virtual shares, and the holder of virtual shares, the right includes the ability to vote on the Representatives' Commission, my understanding is that it is the only right of the profit share that those shareholders have. So does the true beneficial owner of Huawei Holding company, and the Trade Union Committee in any way answer to the Representatives' Commission? Is there any influence at all that the Representatives' Commission has on the Trade Union Committee?
My second question is, you mentioned 7 people on the Trade Union Committee, and I was just wondering do those 7 people observe any kind of operational control over either Huawei Holding or any of the universe of the Huawei companies? And does Mr. Ren have any veto power over that particular body?
And my last question, you mentioned earlier the Trade Union Committee reports upwards to the Shenzhen Union Committee, and I was wondering does that body influence any way the deliberation of the Trade Union Committee in Huawei at all?
Jiang Xisheng: Regarding your first question, the shareholding employees elect the Representatives on a one-vote-per-share basis, and Representatives exercise shareholder rights on their behalf. As there are over 90,000 shareholding employees, it would not be feasible to have regular meetings for all shareholders; the costs would be very high. Because of this, we elect representatives for the shareholding employees. More than 110 representatives have been elected to exercise shareholder rights on their behalf. Besides the right to vote, the shareholding employees have a claim to the company's residual property, and also they bear the risk of share depreciation. So in this sense, the shareholding employees have shareholder equity, not just the right to profit sharing.
Regarding your second question, the Representatives' Commission has no influence on the Trade Union Committee, and vice versa. Members of the Trade Union Committee also do not influence the operations of Huawei Holding or Huawei Technologies, because they are not involved in any of the company's business operations in the name of members of the Trade Union Committee.
Regarding the connection between the Shenzhen Federation of Trade Unions and Huawei's Union, Huawei's Union is registered under the Shenzhen Federation of Trade Unions as a legal entity and is subject to an annual audit by the Shenzhen Federation of Trade Unions. Huawei does not need to report anything about its operations to the Shenzhen Federation of Trade Unions.
Q10 Sijia Jiang, Reuters: The first question is about the Trade Union Committee being Huawei's largest shareholder. Can you elaborate more on this organization? It is just responsible for organizing some entertainment activities, rather than being involved in any governance or operational activities of the company. Is this correct? Also, are all of Huawei's 180,000 employees members of the trade union? The Trade Union Committee has seven members. Have there always been seven people in the Trade Union Committee? How are they elected? How often are elections held? Are all of Huawei's 180,000 employees involved in electing the seven members of the Trade Union Committee? Also, are there any Trade Union Committee members who are also Representatives or members of the Board of Directors?
Another question is, according to some media from the UK, the CIA said that Huawei received some funds from the government. But in your presentation, you said there is no national organization that holds any shares in Huawei. Huawei also issued bonds, then are there any national organizations or bodies that hold bonds in Huawei?
Jiang Xisheng: Not all of Huawei's 180,000 employees are members of the Union, because one needs to apply to become a member.Second, members of the Trade Union Committee were not directly elected by all of Huawei's employees. They are recommended by our departments and elected every three years.
The Trade Union Committee does not just organize entertainment activities. They organize activities to improve employees' health and ensure they can work and live better.
There's no restriction or regulation on whether the Trade Union Committee members can also serve as Representatives. According to China's Trade Union Law, the company's main leadership cannot serve as members of the Trade Union Committee.
If you look at the members of Huawei's Trade Union Committee, none of them are members of the Board of Directors. Three of them are members of the Supervisory Board. All but one of them are Representatives.
You mentioned that the US said that there was some government capital in Huawei. That's not true. Most of what the US government says, as we all know, is not true. Regarding this point, we have responded many times. I can confirm again that there is no government capital in Huawei.
Huawei issued some bonds, many in the capital markets in Hong Kong and in countries outside of China. So far, we have not issued bonds on the Chinese mainland.
In addition, the majority of our bank loans come from overseas, around 70%.
Q11 Arjun Kharpal, CNBC: So just back to Yuan's point on the Trade Union Committee pays the Shenzhen Trade Union Committee and then the Shenzhen Trade Union Committee reports to a higher power. You said you're not quite sure of that relationship, but then you also just said that the Trade Union Committee members can be directors of the Supervisory Board and most of them are also shareholding representatives, so to me it doesn't seem like there is much separation between the shareholding representatives, the Trade Union Committee, and ultimately Huawei's business. So how can you assure, I guess, customers, governments, and people that there is that separation when what it seems that you described is quite a close relationship between all of those different parties.
Jiang Xisheng: First, it's true that I don't know the relationship between the trade union organization and its upper-level organizations. It is not something that we should concern ourselves with, and I don't need to know that.
Second, the Trade Union Committee and Representatives' Commission actually run separately and are completely independent from each other in terms of responsibilities, funding, and operations. What you said just now is about different things at Huawei. The Trade Union Committee organizes leisure activities for employees, to improve their health and ensure they can work and live better, but it has nothing to do with Huawei's daily business operations.
If you ask the members of the Trade Union Committee, they may mention they don't meet regularly. The Trade Union Committee exists because of the country's legal requirements, and they are just responsible for organizing the employee engagement activities mentioned earlier. The Trade Union Committee members do not need to execute these activities themselves.
The Representatives' Commission is Huawei's highest decision-making body. It makes decisions on Huawei's key business activities.
Q12 Li Tao, South China Morning Post: Trade unions in China play a very small role, and is this also the case for Huawei? Huawei's Trade Union Committee is solely established to meet legal requirements and is responsible for organizing leisure activities for employees?
Jiang Xisheng: Partially true.