The plane chartered by the Chinese government carrying Meng Wanzhou, Huawei’s CFO stranded in Canada for three years in an U.S.-led investigation of Huawei’s misconduct, landed on Sept. 25 in Shenzhen, where the telecommunications giant is headquartered. Immediately, it precipitated a wave of punditry about China’s hardball tactics that eventually won her freedom, and a cacophony of chatter about its implication to the deteriorating Sino-U.S. relationship.
Little attention, however, is paid to the real elephant in the room: Huawei’s true identity.
As the world’s largest telecommunication equipment maker, Huawei has been trying to penetrate western markets in the past decade. Its ambitious campaign for global expansion, however, has largely stalled in recent years due to intervention by the U.S. government on suspicions of the company’s close ties to the Chinese government, a charge that the company vehemently denies. So far, the most effective defense the company has put up is the claim that the company, launched in 1987 by Ren Zhengfei, Meng Wanzhou’s father, is privately owned and would not spy for any government.
Ms. Meng’s release, an apparent public relations coup for Huawei—evidenced by the homecoming slogans hung at the company and welcoming-back messages emblazoned on employees’ mugs—can create trouble for the technology giant in the courtroom and congressional hearings when it fights the U.S.-led embargo of chip supplies that have caused an estimated 80 percent decline in its smartphone sales.
The moment Meng was detained in 2018, securing her release had become one of the top priorities of China’s entire diplomatic establishment. This entailed an immediate, stern statement from its Canadian Embassy for clarified positions of Canada and the United States over the matter, and a subsequent briefing by Geng Shuang, the Foreign Ministry spokesperson, that highlighted the same message. In 2019, Geng repeated the “clear-cut” and “firm” position of the government at a press conference that charged that both the United States and Canada had abused their extradition treaty in Meng’s case.
During 2020, three colleagues of Geng, on three different occasions, called for the unconditional release of Meng. One of them, Hua Chunying, made an official remark within 24 hours of Meng’s return that the fraud charges against Meng were baseless and her detention arbitrary. It remains a mystery how the Chinese government can be so sure of a private citizen’s innocence in her overseas business dealings right after her detention when her employer, presumably a private business, operates beyond the orbit of China’s official hierarchy.
Not So Independent
Even before Meng’s detention, there was already circumstantial evidence in Huawei’s evolution, from a small business of humble origins into a global conglomerate, that would cast doubts over its claim of independence from the Chinese government. Take its name, Huawei, as an example. The two Chinese characters are a name of a young, handsome communist agent enrolled at Chong King University in “Red Rock,” a rare, indoctrinating best-seller chronicling his many heroic feats against the nationalist police and their CIA advisors ahead of the communist takeover of the city of Chong King. The novel must have caught the imagination of a young man similar in age, and harboring analogous aspirations, of the fictional Hua Wei; since its debut coincided with the enrollment of an actual student at Chong King University. His name is Ren Zhengfei, the founder of Huawei and Meng’s father.Internet searches conducted several years ago of Mr. Ren’s biographical information would reveal that he joined the Engineering Corps of the People’s Liberation Army (PLA) after college and became so distinguished in his service that he was invited to attend, as a delegate of the PLA, the prestigious National Conference for Science, held under the auspices of Deng Xiaoping in 1978. Ever since the controversies erupted about Huawei’s connection with the Chinese government, and their potential security concerns in the West, this illustrious chapter in Ren’s career is now nowhere to be found on the internet.
According to a Wall Street Journal article published in December 2020, the Chinese government launched a campaign against private business to rein them in by “installing more Communist Party officials inside private firms, starving some of credit and demanding executives tailor their businesses to achieve state goals.” In November 2020, the government blocked a $37 billion initial public offering, touted the largest in history, of Ant Group, one of China’s biggest private businesses; its owner, the legendary entrepreneur Jack Ma, disappeared from public view at the same time while Alibaba, also owned by Ma, was entangled in an antitrust investigation.
The Wall Street Journal also highlighted the dramatic drop from grace—and loss of fortune—of Wen Jianping, another billionaire, the owner of the former Beijing OriginWater Technology now being forcefully taken over by a state-owned firm. Wen likened state companies to trees and private firms to shrubs. He said, “in the future, the trees will become larger and larger … shrubs will be transformed, becoming either a branch or an herb and the herb will die.”
No one can question Huawei’s growth in China, and there is obviously no stopping of the tree only growing bigger and bigger. As far back as in 1999, Wu Bangguo, China’s vice-premier in charge of state-owned enterprises, personally intervened to clear the company of a tax fraud allegation. In another Wall Street Journal article, published in December 2019, Huawei received as much as $75 billion in tax breaks. In the five-year span up until then, Huawei’s official subsidies, as disclosed in its annual report, were 17 times as large as similar subsidies disclosed by Nokia Corp, the second-largest telecom equipment maker in the world.
Indeed, Jack Ma’s sudden disappearance and Wen Jianping’s surreal change of fate provide the perfect answer on how to interpret Meng Wanzhou’s unanticipated reappearance.
Huawei’s military background is borne out by its extensive recruiting of STEM talent from Chinese universities historically affiliated with the People’s Liberation Army (PLA). Topping the list of number of graduates gobbled up by the tech giant has perennially been Xi’an-based Xidian University, the formerly prestigious PLA’s Institute of Telecommunications (commonly known as Xi Jun Dian). Along with PLA’s Harbin-based Military Engineering Institute (now defunct Ha Jun Gong), it was one of China’s premier universities in science and technology for military applications. Now, China’s Jun Gong Qi Zi, referring to the seven universities tasked with training scientists and technicians to serve the needs of the PLA, including all Ha Jun Gong campuses scatted across the country, are on the entity list of the Department of Commerce, meaning they are banned by the U.S. government in personnel exchange and equipment acquisitions. But they are all major feeder schools for Huawei.
Meng’s histrionic release may have announced the end of the saga of “saving CFO Wanzhou.” It meanwhile offers the most damning evidence that Huawei is a state actor in the field of science and technology just as Meng is a political figure in the eyes of the Chinese government. If anyone still believes Huawei is no threat to our security and its embargo should be lifted, he is an ostrich burying his head in the sand.
