IT House, September 16, Huawei, September 16, 2009-16, Huawei, Sept. 16, Huawei.
In an interview, Ren Zhengfei described Huawei's financial performance in the first eight months of the year, with revenues up 19.7 percent and profits flat from last year. Turning to the reasons for the lack of profit growth, he explained that it was mainly due to a significant increase in strategic investment, with Huawei adding thousands of employees, all of whom were highly qualified personnel, to repair what had been broken down by the list of entities (in the United States).
Ren Zhengfei said that before the end of the decline in overseas, the speed of decline is slowing down, about 10%.
Regarding the upcoming release of Huawei Mate 30 series pre-installed services on September 19, Ren Zhengfei said that there was no pre-installed GMS ecosystem of Google.
Ren Zhengfei said, first of all, we still want to continue to use Android system, we and Google are still very friendly. 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?
He also confirmed to the economist that huawei could authorize the transfer of 5g technology and technology to western countries at one time and other western countries to produce the same equipment. For the reporter's inquiry, the Huawei founder stressed:
The following is the full interview:
1. President of the Beijing Branch of the Economist,
Ren Zhengfei: You are welcome to ask straight questions, 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 sixties and seventies of the last century, the West ran into a serious economic crisis, which was a labor conflict. Western economists put forward a theory
How to solve this problem in terms of the relationship between Europe and China alone. China will fulfill its commitment to WTO and open up its service industry and manufacturing industry on a large scale.
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 just mentioned how countries such as Europe and Japan view economic globalization, but you don't mention the United States alone. In view of the current Sino-US relations, are you worried about the future direction 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 return of the world is to accept the dollar as the international circulation and reserve currency. The United States levies seigniorage tax on the world by issuing the dollar. If the United States continues to assume responsibility for maintaining the stability of the world order, it will not suffer. But now that the United States itself has broken the mechanism, 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 dollar swings, there will be a crisis in U.S. debt and American stocks, which will lead to huge economic and political turmoil 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 civilized in the Tang and Song dynasties. At that time, China was the most powerful country in the world. The image of the prosperous times in the Qingming River map was not fictional, but a true portrayal. Hundreds of years ago, British philosophy and social system promoted the industrial revolution. The British invented the train and the ship, while China was basically a carriage. The carriage was slower than the train, the carrying capacity was lower than the ship, and China lagged behind. Britain has become an industrial power in the world, selling industrial products to the world, which has a great impact on the social progress of all countries. Up to now, 2 / 3 of the world's population can speak English, which is that speed 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 British universities are the best in the world. If you want to revive industry, you must master high speed in the information society. Optical fiber network, based on 5G technology of optical fiber network, can connect supercomputer, superstorage system and support artificial intelligence. If artificial intelligence can make existing capacity ten times more efficient, Britain will become an industrial power with hundreds of millions of people. I said
4. Patrick Foetus: I'd like to ask about Huawei in the past few months as well as the impact of the U.S. crackdown on China. Can I talk about Huawei's joining in May of this yea
Ren Zhengfei: In August of this year, our income has increased by 19.7%, profit and the same level as last year, and no growth. The rate of income growth is decreasing, from around 30% in the beginning of the year,23% in the year and 19.7% in August. The profit didn't grow, mainly the strategic investment in the big increase, we added thousands of staff, the staff are high-quality talents, such as some talented young, the doctor who graduated, they are mainly to repair the breakdown of our entity list
Now the impact of the list of entities on us is the terminal, the terminal.
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: Some time later this month, you will launch Huawei Mate 30 series of new mobile phones. 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 idea of introducing foreign investors, because the way investors think is profit-centered, and our company is more ideal than investment interests. As for whether technology can be allowed to be transferred to Western countries? Sure。 It's not part, it can be all. Huawei's ideal is
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 build. If you buy technology and occupy a small market, it is not worth it. It is necessary to occupy a large market, first of all, to assess their 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: Quickly.
Patrick Foulis: Is it possible before the general election in 2020?
Ren Zhengfei: It has nothing to do with the general election in the United States. We never mentioned the general 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. China is an autocratic country, it is difficult to achieve real innovation. Today, we look at companies like Huawei in China to make innovation. China's political system is a one-party system. People can not see everything on the Internet, nor can they read all books. Will this limit China's innovation and creativity? Do you think that democratic political system is more advantageous than other political systems in terms of innovation?
Ren Zhengfei: The foundation of innovation is academic freedom. It is very important to have free academic thought and free research direction. The United States undoubtedly has the most innovative soil in the world. With the advent of the Internet, people have more freedom and convenience to access all kinds of information. Especially, science and engineering papers are not ideological and can be freely published and shared around the world.
For example, the source of 5G technology is a mathematical paper by Turkish mathematics professor Arikan2007. More than a decade ago, two months after he published his paper, we found this paper and invested a lot of research effort to analyze it into today's 5G standard. China's ideas in the field of science and technology are still blooming, Huawei still has a lot of foreign scientists, we try to absorb the nutrition of this era, let ourselves move forward quickly.
David Rennie: It is true that we can see scientific and technological papers on the Internet, but there are also political and historical content on the Internet, which is not visible in the vast majority of China, because the Chinese government has blocked the information. We also see Huawei's beautiful campus in Dongguan, with many European buildings. Huawei will not make sure that the designers, the researchers have a VPN on the Internet to get foreign news, understand the foreign political events and other important issues?
Ren Zhengfei: If Huawei engineers become politicians, Huawei may collapse. Engineers don't go to politics. What do they do with so many political problems? Just do the goods well. If our engineers go out to parade, who pays?
David Rennie: Deng Xiaoping made a famous speech in March 1978. When he talked about Chinese science and technology, he said that scientists should now concentrate on scientific research instead of reading so many political papers or studying politics. When I talked with some university professors in China, they said that they were under pressure now. They spent a lot of time studying Xi Jinping's thought, understanding politics and leaving themselves very limited time to think. As a private enterprise, does Huawei feel pressure to learn politics and understand politics? Or, as Deng Xiaoping said in 1978, to some extent, to protect your scientists from politics and focus on scientific research?
Ren Zhengfei: When Deng Xiaoping said this, I was at the scene, and that was at the National Science Congress, where there were 6,000 national science representatives, and I was one of the six thousand people. He spoke of it.
David Rennie: you are a party member, now party members have a mobile phone dedicated to the study of Xi Jinping's thought of the application. Do some people think that some members of the Communist Party of China have forgotten Deng Xiaoping's 1978 speech and want busy people like you to spend one or two hours a day studying politics?
Ren Zhengfei: chairman Xi Jinping spoke in all aspects, on agriculture, health, and rural construction.
I listened to the chairman, who spoke at the Boao Forum
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?
Ren Zhengfei: I don't know anything about these two people. We don't know what the country is doing. I only know that Meng's arrest of Meng's boat is a mistake, which should be solved by the court. No one has told me about them. There is no need to tell me about them. I have no way to know about them.
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: Firstly, Huawei insists on the protection of network security and privacy as the company's highest program, firmly implements the European GDP R standard, and comprehensively implements it in all systems. We are now investing huge amounts of money in renovating new networks and building 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 supervision from various countries, and the UK is the most stringent one. 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, so the UK will 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, I will retire. I'll retire when I can't keep up with my thinking. I'm still in a state of mind. Stay for a few more days.
Stephanie Studer: How long do you think you will retire?
Ren Zhengfei: I don't know, according to need.
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 that it was produced by Barack Obama. I've 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: What I said about 5G is to grant permission, not to do it ourselves. We hope that the West can shorten the platform path forward, so allow other companies to fully access our technology. For 6G research, we are also leading the world, but we judge that 6G will not be put into use until 10 years later. Therefore, technology transfer is not the end of our progress. We will make greater strides when we get the funds.
Patrick Foulis: Confirm with you, what you're saying here
Ren Zhengfei: Yes, one-time 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.
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.
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: Right. If they really want to buy, 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.