"now from 5G. To the core network, the network "hole" we have completed. We will release the Shengteng AI cluster, 1024 nodes, on September 18, the fastest artificial intelligence platform in the world. " Said Ren Zhengfei.
He also confirmed to the Economist,HUAWEITechnology and technology can be licensed to be transferred to Western countries, and other Western countries can be licensed to produce the same equipment. As for the reporter's questioning, the founder of Huawei stressed: "It's only a technical secret, and it's impossible to transfer employees."
The following is the full text of the interview summary, which has been deleted:
1. David Rennie, president of Beijing Branch of The Economist and columnist of Teahouse: Ren, you are a very important global business leader. Therefore, before raising other Huawei-related questions, we would like to ask you a question about globalization and what challenges technology brings to globalization. You now have many big companies selling products and services that can only happen in a highly trusted world, because you sell not tennis shoes or tennis racket, but autopilot cars or medical equipment. From the perspective of globalization, trading for such products needs to be based on lifelong trust. But countries like China and the United States have a hard time building trust with each other. Can this problem be solved? How should we solve this problem? We'd like to hear your opinion.
Ren Zhengfei: You are welcome to ask questions frankly, and I will answer them very frankly.
Economic globalization is of great benefit to human beings as a whole, because it is of great significance to the optimal allocation of resources and the reduction of service costs, so it will accelerate the progress of society. Economic globalization was first put forward by the western society. The guiding ideology of the West is that the West provides advanced technology and equipment, and the developing countries provide raw materials and low-end labor, so as to carry out globalized economic and trade. But the West did not expect that developing countries, starting with low-end production, would gradually move to the high end.
In the 1960s and 1970s, the West encountered a serious economic crisis, which was called labor-capital conflict. Western economists put forward a theory of "high wages, high prices and high consumption", which solved the plight of the West in a short time and achieved rapid economic development. Until the end of the last century, the western society experienced rapid economic growth in decades. This economic model is based on the need for high income, if there is no high income, it will not be able to complete the high income distribution. Although developing countries provide a vast market, developing countries will also have a large number of commodities into developed countries. This conflict and contradiction is not a problem of globalization itself, but the correct coordination between the two development mechanisms.
How to solve this problem in terms of the relationship between Europe and China alone. China will fulfill its WTO promise to open the service industry and manufacturing industry on a large scale. The pace of opening up in the past two years has accelerated, a little later than promised. Britain and Europe have experienced hundreds of years of accumulation and full experience in the service industry, and there is also great demand in China. If the European service industry enters China on a large scale, it will be conducive to China's social progress. China uses products to make money from Europe, and Europe uses products and services to earn back from China, which is good for financial balance. For example, China's car tax will be reduced to a very low level in five years. British and European cars are the best quality cars in the world, and Japanese cars are the most affordable and of good quality. Therefore, the problems arising in globalization need to be negotiated, one to achieve a solution. It is not that globalization itself is wrong, but that the mechanism has some problems in the new environment, but has not sat down to coordinate.
Russia, for example, if the European Union had accepted Russia to join the European Union, Russia's energy and Western machinery and equipment transactions were estimated to be at least 1 trillion euros. These economies were injected into Europe, helping Europe to resolve the contradiction between rich and poor.
I had good communication with Osborne and Cameron. At that time, Osborne lowered British tax revenue to 21%, which did not affect the UK's finances. Why? The recipients need to be eligible for relief. They must go to work or do some public services, such as caring for the widowed and the elderly, public health and so on. The reduction in tax revenue is equal to the reduction in social welfare expenditure, so Britain is stable. The Teresa government continues to announce tax cuts to 17%, and a series of British policies are the genes for Britain to become an investment centre again. Therefore, it is necessary to adapt to globalization in constant self-adjustment, rather than a standard globalization that will adapt to the world. This is my little premature view.
2. David Rennie: I know my colleagues have a lot of questions about Huawei. You have just mentioned how countries such as Europe and Japan view economic globalization, but only the United States has not been mentioned. Given the current Sino-US relations, are you worried about the future of globalization?
Ren Zhengfei: Yes. Because the United States is the most powerful country in the world. It was originally the world police and maintained the world order. The world's return is to accept the dollar as an international currency and reserve currency. The United States levies seigniorage taxes on the world by issuing the dollar. If the United States continues to shoulder its responsibility for maintaining the stability of the world order, it will not suffer. But now the United States itself has destroyed this mechanism, and people no longer believe that the United States is maintaining world order, nor that the dollar is the most reliable reserve currency. When the world's trust in the United States and the United States dollar wavers, there will be crises in US debt and stocks, which will trigger tremendous economic and political instability within the United States.
3. Patrick Foulis, London Business Editor of The Economist: In 2019, American diplomats made great efforts to persuade American allies not to use Huawei equipment. Excuse me, Mr. Ren, has the series of actions taken by the United States succeeded now? The main targets of these efforts in the United States are its core allies, such as Britain and Australia, but it seems that Vietnam and other countries are also facing tremendous pressure from the United States to refrain from using Huawei equipment. How successful is the US boycott of Huawei now?
Ren Zhengfei: First of all, it is a normal business choice to buy Huawei equipment or not, because in the past, many customers did not buy Huawei equipment, and most of the selection process was for commercial reasons. But when choosing 5G as a political factor and a dangerous commodity, the United States may be wrong. The choice of 5G should be in favor of national development, not political.
Let me give you an example. A thousand years ago, China was in the Tang and Song civilizations. At that time, China was the most powerful country in the world. The image of the flourishing age of Shanghe Tu in the Qingming Dynasty was not fictitious, but a true description. Hundreds of years ago, Britain's philosophy and social system promoted the industrial revolution. The British invented trains and ships, while China was basically a carriage, which was slower than trains and had lower cargo load than ships. China lagged behind. Britain has become a powerful industrial country in the world. It sells industrial products all over the world, which has a great impact on the social progress of all countries. Up to now, two-thirds of the world's population can speak English, which is the speed that determines social progress.
5G is a high-speed, high-bandwidth, low-latency information connection technology, representing the speed of the information society, who masters the speed, who will move forward quickly. In the information society, giving up speed and choosing excellent information connection technology may also slow down its economy.
The British people are very smart, and the British universities are among the best in the world. If we want to revive the industry, we must master the high speed in the information society. Optical fiber network, 5G technology based on optical fiber network, it can connect supercomputer, super storage system, support artificial intelligence. If AI could make existing capacity ten times more efficient, Britain would become an industrial power with hundreds of millions of people. When I say "ten times more efficiency", I am casual. In extreme cases, it is possible to increase efficiency by a hundred times or a thousand times. The ancestor of artificial intelligence is Turing, he is British; Dolly, the cloned sheep, is also British. What would the world look like if genetic technology and electronic technology were integrated into one? I can't imagine. Britain has enormous room for revitalization, and its speed determines whether it will succeed or not.
4. Patrick Foulis: I would like to ask about Huawei in the past few months and what impact the US crackdown has on Huawei. Can you tell us about your financial performance since Huawei was added to the Entity List in May this year? Will income decline as a result of the Entity List event?
Ren Zhengfei: By August of this year, our income had increased by 19.7%. Profit was the same as that of last year, but there was no increase. Income growth is declining, about 30% at the beginning of the year, 23% at the middle of the year and 19.7% in August. Profit has not increased, mainly because of the dramatic increase in strategic investment. We have added thousands of employees, all of whom are high-quality talents, such as some talented young people and recent PhD graduates, who come mainly to mend the "holes" that we have been punctured by the list of entities. Now from 5G... To the core network, the "hole" of the network has been filled. On September 18, we will launch the Teng AI Cluster, 1024 nodes, which is the fastest AI platform in the world.
Now the impact of physical list attack on us is the terminal, the "hole" of the terminal still needs some time to fill.
Patrick Foulis: Is the overseas consumer business shrinking and declining now?
Ren Zhengfei: Before that, the terminal had declined overseas, the speed of decline was slowing down, about 10%.
5. Patrick Foulis: Later this month, you will launch Huawei Mate 30 series.Mobile phone。 Does the Mate 30 series have Android and Google applications installed? What's the situation now?
Ren Zhengfei: There is no GMS ecosystem pre-installed with Google.
Patrick Foulis: Then I have another question. If Huawei's mobile phone can't pre-install a full set of Google applications, can it be predicted that Huawei's overseas sales of mobile phones will be much lower than before? Does that mean Huawei will face a big financial blow in the second half of the year, including the fourth quarter?
Ren Zhengfei: First of all, we still want to continue using Android. We are still very friendly with Google. If the U.S. government does not allow us to use it, we also have alternatives, but if we want to replace it, it will take two or three years to complete. Therefore, we think it is normal that terminal overseas sales have declined during this period. In addition to ecological applications, our mobile phones also have many special high-quality performance, so we think that there will still be customers like and accept our products. Mate 30 mobile phone was released in Munich on September 19. According to the release at that time, what was loaded in it?
Patrick Foulis: During Huawei's preparations for launching its own operating system, do you think it is possible to make a loss?
Ren Zhengfei: No. Growth will slow down, but there will be no loss.
Patrick Foulis: If I were in charge of Google, how worried would Huawei be as Google when it finally launched the operating system around the world?
Ren Zhengfei: Google is still persuading the U.S. government to license us to use its ecosystem. We are in the same mind with Google on this issue. Our operating system was not originally developed for mobile phones, and Google's operating system is open source, and we will continue to use it. What we can't use in the United States is Google's GMS ecosystem, involving tens of millions of partners, and Huawei can't replace it in a day or two. If the U.S. government approves US to continue using the Google ecosystem, American companies will monopolize the world; if the U.S. government does not approve, American companies will become less competitive in the world.
6. Patrick Foulis: We know that one of your tasks is to rebuild trust. Has Huawei considered offering some radical options or solutions for rebuilding trust? For example, if you sell some 5G business outside the Chinese market to other companies, have you considered such radical plans to restructure the company so as to rebuild trust?
Ren Zhengfei: We are unlikely to adopt the scheme of introducing foreign investors, because the investors'way of thinking is profit-centered, and our company's ideal is higher than the investment interests. As for technology, can it be licensed to transfer to Western countries? Yes? Not part, but all. Huawei's ideal is "to provide services for all mankind and strive to climb the peak of science", more people come to complete together, in line with our values. So can other Western countries be allowed to produce the same equipment as ours? Tolerable.
Patrick Foulis: To reconfirm with you, do you mean the transfer is to sell 5G business in some areas, or to license technology?
Ren Zhengfei: Both technology and technology can be licensed, and they can develop on this basis.
Patrick Foulis: Under this model, Huawei employees and related facilities and sites are transferred together or are they just intellectual property rights?
Ren Zhengfei: It's only a technical secret. It's impossible for employees to transfer it.
Patrick Foulis: What are the potential partners? For example, which companies in the United States are considering?
Ren Zhengfei: Nobody has ever talked to me about it. I don't know which companies are available.
Patrick Foulis: You also know that many people in Silicon Valley, including the United States, will read this article, so it's also a good opportunity to publicize it to them.
Ren Zhengfei: Yes, balance contradiction and struggle.
David Rennie: Both Foulis and I have lived in the United States for many years, so more than half of our readers live in the United States all the year round. Your trust in American politics and business is an important way to solve the problem, but some American politicians are not concerned about Huawei's specific technology. What they really care about is the bigger question: Why should Chinese companies build 5G technology in the United States? Therefore, the political problems you encounter in the United States are very difficult to solve. From your point of view, just mentioned 5G technology transfer or this solution, how large will it be? To what extent can Huawei accept 5G technology transfer?
Ren Zhengfei: When we transfer all the technology, they can modify the code on this basis. After modifying the code, it is equivalent to shielding us and the world. American 5G is an independent 5G. There is no security problem. Its security is to control American companies. Not that our company sells 5G in the United States, but that American company sells its 5G in the United States.
Hal Hodson, Hong Kong-based Asian Science and Technology Journalist of The Economist: Did you ever think that besides the United States, you might also meet new entities competing with you in some African or European countries for 5G? Have you foreseen such competition? Or what do you think it will be like?
Ren Zhengfei: It's competitive.
Stephanie Studer, Senior Chinese Business Journalist of The Economist in Shanghai: Do you have a ballpark figure in mind about the transfer amount?
Ren Zhengfei: No figures, you just put forward, I have not yet settled accounts.
Stephanie Studer: Is there a scope?
Ren Zhengfei: I can't tell the scope of the amount. The technical scope can be discussed.
David Rennie: From a political point of view, is it better for American companies to accept technology transfer from China to 5G, or for European or Japanese companies? Or do you think it's better to sell your 5G technology to American companies because the main problem you face is the United States?
Ren Zhengfei: it mainly depends on how many markets you can lay. If you buy technology and occupy a very small market, it is not worth it. You have to occupy a big market, and you have to assess whether you have the ability to occupy such a large market space.
Patrick Foulis: When do you think radical solutions like this will be possible? How many years? Or will it be achieved soon?
Ren Zhengfei: soon.
Patrick Foulis: Is it possible before the general election in 2020?
Ren Zhengfei: it has nothing to do with the US election. We never mentioned the election in our chat.
7. David Rennie: I want to ask you a question about politics and culture. Before I worked in the United States, many important American politicians said that China was rising fast, but there was another magic weapon in the hands of the United States: democracy, freedom of speech, including the freedom of university students to learn and think. Do you think that democratic political system is more advantageous than other political systems in terms of innovation?
Ren Zhengfei: it is very important that the foundation of innovation is academic freedom, free academic thought and free research direction. There is no doubt that the United States has the most innovative soil in the world. After the emergence of the Internet, people have more convenient and free access to all kinds of information. Especially, science and engineering papers are not ideological and can be freely published and shared in the world.
For example, the source of 5G technology is Arikan, a Turkish math professor, who wrote a math paper in 2007. More than a decade ago, two months after he published his paper, we found this paper and devoted enormous research efforts to parse it into today's 5G standard. China's ideas in the field of science and technology are still flourishing. There are many foreign scientists in Huawei. We are trying to absorb the nutrition of this era and make our own rapid progress.
David Rennie: just mentioned Hong Kong. Recently, Cathay Pacific, a private company in Hong Kong, was forced to replace top executives and fire its employees simply because of political factors because their employees took part in demonstrations in Hong Kong. This is equivalent to the central government forcing private enterprises to make political decisions, will this make the situation of Chinese private enterprises more difficult? You are trying to explain that private companies are not influenced by Chinese politics, but the Chinese government has taken action against Cathay Pacific Airlines. Will this make the situation of private enterprises more difficult?
Ren Zhengfei: The situation in Hong Kong is precisely caused by extreme capitalism. The big capitalists have earned a lot of money, including tabloids, underground parking lots and so on.CoffeeMany of the hall is under their control, taking away too much benefits, ordinary people do not have much money, many people living standards are very low.
I read the report of the State Administration of Civil Aviation of China to Cathay Pacific Airlines. Some pilots and flight attendants of Cathay Pacific have acted violently. The Civil Aviation Administration is worried that pilots may have extreme thinking in the flight process, which may cause safety problems. Therefore, it requires Cathay Pacific Airlines to control flight activities to the mainland. Because of concerns about flight safety, such management measures should be reasonable and do not restrict Cathay Pacific's flights to other places. I personally believe that the central government is wise in dealing with Hong Kong. One country, two systems, our management here is different from that of Hong Kong. Marches, demonstrations and slogans in Hong Kong should be allowed, but sabotage is not appropriate. To this day, the central government has not done anything, but if Hong Kong continues to do so, business will be affected, finance will be affected, tourism will be affected, and then the lives of the poor will not be solved. The current situation in Hong Kong is to reflect on the fact that the gap between the rich and the poor should not be too large and there should be no extreme poverty.
The Chinese government has made a lot of efforts to eradicate poverty. In recent years, I have walked along the borders of Xinjiang, Tibet, and Yunnan, and the lives of the people in the border areas have improved greatly. In particular, Tibet, which has improved even more than Xinjiang, is very stable. I will not know what the situation is until I see it with my own eyes. It should be open to more foreign journalists to take a look at these places in the future. I personally walked through the poor areas of Yunnan, Guizhou, Tibet, Xinjiang and other places, and saw the improvement of people's lives with my own eyes. I believe that there will be no color revolution in China.
9. David Rennie: Politically, I want to ask you one last question. Many interviews have asked about your daughter Meng Wanzhou incident. Now two Canadians are being detained in China. According to the Chinese Foreign Ministry, this is to teach the Canadian government a lesson. We also learned from the Canadian Embassy that one of them was a former Canadian diplomat. It's not known where they're being held, and they can't see lawyers, family members, or phone calls. Except for a few Canadian diplomats, they have not communicated with others. Their glasses were confiscated and they couldn't even read books. I believe that someone has described this to you. What do you think of the treatment of these two Canadians? Do you think it's appropriate to treat them like this? Should the Chinese government allow them to see lawyers? Your daughter is also being detained in Canada, but you can see lawyers, family members, or you can walk around Vancouver. The two Canadians are treated differently. What do you think?
10. Hal Hodson: As one of the largest enterprises in the field of network infrastructure, Huawei has been growing steadily over the past two decades and has increasingly become the goal of intelligence agencies. It is not only a back door problem, but also a penetration and business operation security problem. Can you tell us how Huawei ensures the safety of its business operation and what countermeasures it has taken?
Ren Zhengfei: first, Huawei adheres to network security and privacy protection as the company's highest program, unswervingly implements the European GDPR standard, and fully implements it in all systems. We are now investing a lot of money to reform new networks and build new ones.
Second, over the past three decades, Huawei has provided network services to more than 1500 operators in 170 countries, covering about 3 billion users, and has maintained a good network security record worldwide. Facts have proved that our equipment has never experienced serious network security incidents.
Moreover, we are willing to accept strict regulation by various countries, the UK is the most stringent regulation. Why is Britain unswervingly using our equipment? Although the UK has also raised the problems and shortcomings of our equipment, it is generally more rigorous than other companies, and the UK will therefore trust us more.
11. Stephanie Studer: Mr. Ren, we know that Ma Yun, the founder of Alibaba, another technology pioneer in China, retired today (September 10). It was announced last year that this is not a common situation. I believe you also know that many business leaders in China retire too late to be good for business development. If you retire, what are the costs and benefits? Given Huawei's current environment, would you consider retiring earlier?
Ren Zhengfei: if you urge me to retire, then I will retire. I will retire when I can't keep up with my mind. I'm still thinking about the state of the spring. Stay for a few more days!
Stephanie Studer: How long do you think you will retire?
Ren Zhengfei: I don't know, as needed.
12. David Rennie: Have you seen the American documentary Factory? If so, how do you think Chinese and Americans work differently?
Ren Zhengfei: I heard it was produced by Obama. I heard the introduction, but I haven't seen it yet.
13. Stephanie Studer: Ask again. You just mentioned that you suddenly had a bold idea this morning to sell your core business. I think you want to say 5G? Then you will continue to develop 6G, or even a new generation of technology. What triggered this idea? Is it possible to just avoid the problem? What if you wait for 6G to come out and people don't accept it? So what are the specific benefits of doing so for you? What are the main reasons for this?
Ren Zhengfei: I said that the 5G is given permission and is not equal to what we do not do. We hope that the West can shorten the path of the platform, so let other companies get the full access to our technology. For the 6G study, we are also the leading world, but we have judged that it will begin to be put into use after a 10-year period. As a result, the transfer of technology is not the end of our progress, and we'll be more steps forward in the future.
Patrick Foulis: To confirm with you, the "licensing" here is not an annual licensing fee like Huawei's licensing to Arm. It's a one-time transaction, where the buyer buys out the right to use the technology and intellectual property permanently at one time.
Ren Zhengfei: yes, one-off payment.
Patrick Foulis: What do other Huawei executives think about this plan? I wonder if you have time to discuss the plan with them. Would they be surprised when they heard the idea?
Ren Zhengfei: no, we already hope that the world will be balanced and that everyone's interests will be beneficial to Huawei's survival. The equal sharing of interests was originally put forward by Britain more than a hundred years ago.
David Rennie: I find that you like to use the old Soviet Il 2 airplane with bullet holes as a metaphor. When you talk about 5G, my feeling is that it's a bit like a pilot, because I'm afraid the plane will crash, so I throw away some of the heavy things in order to keep the plane flying. Can this description reflect your inner thoughts?
Ren Zhengfei: no. Because after we transfer the 5G license, we will get part of the money, which is like firewood, which can burn our future scientific research even more.
Hal Hodson: Do you think the business and political circles in the United States are ready to compete with Huawei on 5G intellectual property?
Ren Zhengfei: no.
Hal Hodson: So, you said this mainly to show a good posture?
Ren Zhengfei: yes. If they really want to buy it, we will really do it.
Hal Hodson: That is to say, if the United States is willing to explore this possibility, would Huawei be willing to give up the lead and return the clock to zero and compete fairly with everyone?
Ren Zhengfei: that's right.
David Rennie: Thank you very much for taking the time to interview us.
Ren Zhengfei: You are welcome to come frequently in the future. If you want to know if we can really survive, you can come back this time next year.