The US cannot crush us, says Huawei founder Ren Zhengfei

The US imposition of criminal charges against the Chinese firm is “politically motivated”

Bain Capital and its minority Chinese partner, Huawei Technologies, have shelved their $2.2bn deal to acquire 3Com, a US computer networking company, saying a key Washington committee charged with vetting foreign investments in sensitive sectors had told Bain it would not approve the purchase.

The setback to the deal highlights rising protectionist sentiment in the US as both Democrats and Republicans, seek to woo an American electorate suspicious of foreign investment and the effects of globalisation on domestic jobs.

Huawei was set to own 16.5 per cent of 3Com and get board seats, but in an effort to limit possible political objections it was to have no management control.BEIJING, CHINA (CHINA OUT) File photo of Ren Zhengfei, founder and CEO of Huawei Technologies. Bain Capital and its minority Chinese partner, Huawei Technologies, have shelved their $2.2bn deal to acquire 3Com, a US computer networking company, saying a key Washington committee charged with vetting foreign investments in sensitive sectors had told Bain it would not approve the purchase.(Photo by An Dong/ChinaFotoPress)391667024 (Newscom TagID: giexpress056021)     [Photo via Newscom]
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The founder of beleaguered Huawei, China's largest tech company, said there is “no way the US can crush” the firm, even as it remains embroiled in a string of criminal allegations from Washington.

Ren Zhengfei told the BBC the arrest of his daughter Meng Wanzhou, Huawei’s chief financial officer, while she was transiting in Canada on her way to Mexico, was politically motivated, in his first international television interview since her detention in December.

The US is pursuing criminal charges against Huawei and Ms Meng, including money laundering, bank fraud, stealing trade secrets and violating US trade sanctions against Iran. Ms Meng and Huawei deny any wrongdoing.

“Firstly, I object to what the US has done,” Mr Ren told the BBC. “This kind of politically motivated act is not acceptable...The US likes to sanction others, whenever there’s an issue, they’ll use such combative methods. We object to this. But now that we’ve gone down this path, we’ll let the courts settle it.”

Last week, US Secretary of State Mike Pompeo issued a threat to the country’s allies urging them not to use Huawei technology as it would make it more difficult for Washington to “partner alongside them”. Australia, New Zealand and the US have already banned or blocked Huawei from supplying equipment for their planned 5G (ultra-fast) mobile broadband networks, while Canada is reviewing whether Huawei’s products present a serious threat to security.

The UK’s National Cyber Security Centre has stated that any risk posed by using Huawei technology in UK telecoms projects can be managed. Vodafone, EE and Three are among UK mobile companies that are working with Huawei to develop 5G networks.

Many of the UK’s mobile companies, including Vodafone, EE and Three, are working with Huawei to develop 5G networks. A government review is due in the spring that is supposed to determine whether they can use Huawei technology.

The targeting of Huawei coincides with escalating tensions between the US and China and a trade war that may advance should the world's two largest economic powers not reach an agreement by the agreed March 1 deadline.

“We are seeing a trade dispute that is morphing into a long-term strategic competition between the US and China for dominance – one of these areas being technological dominance. Huawei is really in the heart of this conflict," said Cailin Birch, Global Economist at the Economist Intelligence Unit. “There is growing economic pressure on both sides to make some concessions and to find a deal, but neither side has shown any real willingness to make concessions on the most important issues such as greater intellectual property protection and forced tech transfers. Both of these issues will become critical to technological dominance in the future."

During his interview with the BBC, Mr Ren dismissed suggestions that the company faces rising pressure from the US and other global governments.

“There’s no way the US can crush us,” he said. “The world cannot leave us, because we are more advanced. Even if they persuade more countries not to use us temporarily, we can always scale things down a bit.”

He also said the “East will still shine”, even if “the lights go out” in the West. “And if the North goes dark, there is still the South. America doesn't represent the world. America only represents a portion of the world.” However, he said the potential loss of business could have a significant impact.

Even if the UK instigates a ban on using Huawei technology following the Spring review, Mr Ren said Huawei would continue to invest in the UK. “We still trust in the UK, and we hope that the UK will trust us even more,” he said.

“We will invest even more in the UK. Because if the US doesn’t trust us, we will shift our investment from the US to the UK on an even bigger scale.”

According to the company's 2017 annual report, Huawei derived 50 per cent of its revenue from China, which was followed by Europe, the Middle East and Africa as one unit (27 per cent), Asia Pacific in third place (12.3 per cent), the Americas in fourth (6.5 per cent) and other markets accounting for 3.5 per cent of total sales.

“Huawei is heavily involved in western markets, but they are also very involved in the emerging markets. If they were to drop out of western markets, they have plenty of opportunities elsewhere," said Ms Birch. "Huawei is now very capable of developing – they are far advanced in the 5G field. So whilst it is certainly a benefit for Huawei to stay in western markets, it is not a necessity.”