The Relationship Between Huawei and the Chinese Regime’s Factional Politics

By Joshua Philipp, The Epoch Times
December 13, 2018 Updated: December 21, 2018

The arrest of Huawei Chief Financial Officer Meng Wanzhou by Canadian authorities has thrust the world’s largest telecommunications company into the international spotlight.

While officially considered a private enterprise, Huawei isn’t listed on any stock exchange, and governments around the world consider the company an important tool for China’s communist authorities. U.S. prosecutors have accused Huawei of using a Hong Kong company to skirt sanctions imposed on Iran, mirroring earlier charges against ZTE, another prominent Chinese tech company that sold U.S.-made equipment to Iran and North Korea.

Taken at face value, Huawei is an employee-owned private company. Founder Ren Zhengfei officially holds 1.4 percent of Huawei’s shares, while the rest are distributed to 80,000 employees via the company’s trade-union committee.

However, the committee has no other role, and Huawei workers automatically lose their shares when they leave the company. Real power is held by company managers and their Chinese Communist Party (CCP) connections.

A look at the company’s top personnel reveals that Huawei has close informal relationships with Chinese security forces, the military, and the CCP political faction associated with former Party leader Jiang Zemin.

Ren has a background in the Chinese People’s Liberation Army (PLA), with his first wife, Meng Jun, being the daughter of a prominent PLA political officer. Their first daughter is Meng Wanzhou, the recently arrested CFO and vice-chairwoman of Huawei.

Ren, whose own family was persecuted in the Cultural Revolution during the 1960s and 1970s, married into his wife’s family. As a result, Meng Wanzhou took her mother’s surname.

Meng Jun’s father, Meng Dongbo, rose from his position in the PLA to become CCP secretary of a city in Sichuan Province, and eventually became the province’s deputy governor. He also served as a representative in both the Sichuan provincial People’s Congress and the National People’s Congress during the 1980s.

Ren, who enjoyed a good relationship with his father-in-law, was supported by his political connections.

Huawei Chairwoman Sun Yafang, who has been in the position since 1999, is another prominent figure in the company and considered one of the most powerful women in the world. According to CIA reports, she has a background in the Ministry of State Security (MSS), China’s intelligence agency.

Huawei, Spies, and Factional Struggle

Sun’s influence within Huawei overshadowed Ren’s. In 2010, Sun pressured Ren into giving up plans to promote his son, Ren Ping, as heir of Huawei. This suggests that Huawei is largely controlled by Chinese regime intelligence.

Additionally, prior to the corruption purges launched by current Chinese leader Xi Jinping, the MSS was firmly in the hands of the Jiang faction.

The heads of the MSS between 1985 and 2016 were Jia Chunwang, who served until 1998, then Xu Yongyue, who was on the job after Jia until 2007, when he was replaced by Geng Huichang.

Jia has strong relations with former Communist Party leader Jiang and his allies. Jia’s son-in-law is Liu Lefei, the chairman of CITIC Private Equity Funds Management Co. Ltd. and the son of Liu Yunshan, a retired high-ranking CCP official linked to Jiang. Before his retirement at the beginning of this year, Liu Yunshan was one of seven members of the Politburo Standing Committee that leads the Communist Party.

Xu is the son of Party officials and also associated with the Jiang faction, having served as minister of state security at the time when Jiang’s political influence was at its peak.

Geng worked closely with Zhou Yongkang, another former member of the Politburo Standing Committee. Zhou, now imprisoned on charges of corruption and plotting to undermine Xi’s leadership, is a central figure in the Jiang network. He was purged in 2014; the next year, he received a death sentence that was commuted to life in prison.

Geng was placed under investigation in 2016. That November, he was replaced by Chen Wenqing, a former deputy secretary of the Fujian Province CCP committee. Chen is considered an ally of Xi Jinping.

Huawei’s Role in the CCP’s Censorship Infrastructure

Jiang Zemin was general secretary of the CCP from 1989 to 2003. After Jiang’s retirement, his associates, many of whom had been promoted to high positions in the CCP and the Chinese government, carried out his influence throughout the two terms of Chinese leader Hu Jintao.

Individuals in this sprawling web of patronage are still being rooted out in a continuous anti-corruption campaign, years after Xi Jinping came to power in 2013.

Wang Youqun, who served as a CCP disciplinary official between 1993 and 2002, told The Epoch Times that according to a former Huawei employee familiar to him, Huawei was a company used for intelligence, and that it served “the previous dynasty,” that is, the leadership of Jiang.

Aside from nepotism and corruption, Jiang is notorious for starting new abuses of human rights under the CCP, most notably the nationwide campaign against the spiritual practice Falun Gong in 1999.

In order to better monitor and censor online expression, the Jiang leadership launched the vast system of internet controls popularly known as the Great Firewall of China.

With its close connections to the Chinese regime under Jiang, Huawei has played an extensive role in building and upgrading the Great Firewall.

An important component in the early stages of the firewall was the Golden Shield Project, which established surveillance over internet users throughout the country.

The Great Firewall and the Golden Shield Project were created under the oversight of Jiang’s eldest son, Jiang Mianheng, who has close ties to Huawei, according to previous reports.

In 2003, the state-run China Central Television reported that the first phase of Golden Shield Project, begun in 2001, had cost 6.4 billion yuan (about $770 million at the time) by the end of 2002. Further expenditures on the project have not been published.

Given the scale, costs, and importance associated with the Great Firewall, it’s unlikely that Jiang would have trusted Huawei to do critical work on the project were he not satisfied with its political background.

Tang Jingyuan, a U.S.-based commentator on Chinese current affairs, told The Epoch Times on Dec. 10 that Huawei chairwoman Sun was likely appointed to her position at the behest of the Jiang faction, which made the company politically reliable.

“They [figures in the Jiang faction] have treated Huawei as their own business since then,” Tang said. “It’s easy to understand why Jiang Mianheng gave its orders to Huawei.”

This article is part of a special report published by The Epoch Times on Huawei. Click here to see all coverage.

Follow Joshua on Twitter: @JoshJPhilipp
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