Huawei had a humble beginning much like Apple, the world’s leader in the smartphone and personal computer industry. Steve Jobs started Apple in a garage in Cupertino, California, in 1976. Huawei’s story began 11 years later, in 1987 in Shenzhen. In the beginning Huawei had only 21,000 yuan ($2,963) paid-up capital with contributions from Ren Zhengfei and five other investors. Ren has long been an admirer of Jobs. Both share the unique characteristic of a strong will and unusual stamina. But Ren’s resilience is complemented by the wisdom embodied in China’s ancient classics: open-minded, humble and always ready to self-reflect, discerning and always ready to serve, flexible, and always having a sense of priorities.
Because of Huawei’s success, the United States has seen it as a threat and launched an all-out assault on the company on both the demand side and the supply side. On the demand side, the US has not only excluded Huawei from its home market but also ganged up with allies to block Huawei from their telecommunication infrastructure, alleging Huawei to be a national security threat. As yet, there has never been any evidence of the presence of alleged “backdoors” in Huawei products that could spy on the users. On the supply side, America has not only cut off supplies of high-end chips from American suppliers but also those from any chipmakers around the world that use American technology. At the same time, even in software, new Huawei handsets are now denied access to Google Play. This significantly affects overseas demand for Huawei smartphones. Huawei quickly went into “survival mode” but after just a couple of years, it is back to business as usual.
Although Huawei was pushed into “survival mode” after the company was put on America’s entity list, Huawei bounced back with 2023 revenue exceeding 700 billion yuan, up 9 percent from the previous year, albeit still behind the approximately 858 billion yuan the company logged in 2019. This result was helped by the launch of the Mate 60 Pro smartphone in August 2023. The West was shocked because this phone was equipped with an advanced 5G chip that was thought to have been denied to Huawei.
Another big surprise is the success of the Harmony operation system, which was launched in 2019. Since a new operation system has to start from scratch in building an ecosystem app developers are comfortable spending time on, and given the inertia of users in introducing a totally new operating system when two major operating systems have dominated the market for years, few would expect that a totally new operating system could find a living space alongside two giants. According to a GizChina report in March, Android commanded 76 percent of the market while iOS came second with 22 percent. In just two years, HarmonyOS was able to grab 2 percent market share. This was “an unimaginable achievement” because Huawei had been subject to the harshest sanctions ever imposed on a company.
Huawei is one of the most innovative companies in the world. The other day I was debating with a well-known commentator on China and global affairs in Hong Kong. I explained to him that China is not a centrally planned economy but a predominantly market economy.
Huawei puts great emphasis on research and development, and so does China. Huawei was always prepared to take on emergency situations and so had “spare tire” solutions in case unforeseen emergencies arose. That is how it is able to survive choking sanctions
China’s “plans” are only visions and mainly comprise a reasonable “wish list” that all stakeholders — all levels of governments and all market participants — work together on to achieve.
Central planning must involve specifics not only on what to do but also on how to do it. A centrally planned economy cannot be innovative because important decisions are all centralized. The Guangdong-Hong Kong-Macao Greater Bay Area (GBA) plan, for example, offers no details at all. But since it was announced, numerous initiatives have been undertaken by different levels of government to facilitate cooperation and division of labor among the 11 cities that constitute the GBA, including infrastructure development and institutional innovations.
Huawei puts great emphasis on research and development, and so does China. Huawei was always prepared to take on emergency situations and so had “spare tire” solutions in case unforeseen emergencies arose. That is how it is able to survive choking sanctions. China’s Belt and Road Initiative reflects the country’s “big picture perspective” and its “open-to-the-world” international view. “Just as the celestial bodies never run out of energy to orbit round and round, so should we always strive to better ourselves,” so the ancient classic I-Ching teaches.
In 2011-12, I conducted a happiness-at-work survey, working with the Hong Kong Productivity Council and I introduced the LIFE framework in the corporate context: A company that cares for the well-being of its staff and attends to consumers’ needs shows “corporate love”. A company whose governance shows a good balance between centralization and decentralization and whose policies show good understanding between costs and benefits over the long term has strong “corporate insight”. “Corporate fortitude” is resilience based on staff identifying with the corporate leadership and its vision. “Corporate engagement” is like employee empowerment: Workers have a strong sense of belonging and engagement because their ideas and contributions are valued and appreciated by the company. Huawei is such a company. Its success is not fortuitous. Similarly, a country’s enduring success like China’s can only be grounded on sense and sensibility.
The author is director of Pan Sutong Shanghai-HK Economic Policy Research Institute, Lingnan University.
The views do not necessarily reflect those of China Daily.
