Huawei’s ‘Dare to Die’ Business Model

Huawai Iran
The Huawei logo is seen during the Mobile World Congress in Barcelona, Spain on Feb. 26, 2018. (Yves Herman/Reuters)

By Nicole Hao

In his analysis of Huawei’s business model, Chinese economist Wang Shuangyi arrived at the conclusion that the massive tech company serves as a “gan si dui,” or “dare to die” kamikaze unit in Beijing’s strategy to dominate markets around the world.

“The basic business model of Huawei can be summed up as a sweatshop [that works as] the Chinese Communist Party’s ‘dare to die unit’ [in a global] Ponzi scheme,” Wang wrote in his Dec. 20, 2018 article.

Wang used the term “dare to die” as a reference to the company’s extreme work environment, as well as its special role in the Chinese regime’s economic ambitions. Being, at least on paper, a privately owned business, Huawei can carry out certain activities that would be too risky or diplomatically inappropriate for a Chinese state firm.

“Under the banner of patriotism and localization, Huawei and [other Chinese companies] copied, plagiarized, and stole” technology from foreign entities, Wang said. They reverse-engineered the foreign tech and “pushed the foreigner suppliers out of China.”

“Then, using their profits from the Chinese market and different types of subsides from China, they exercise active domination in overseas markets,” Wang said. The key to this, according to him, is that Huawei products come with backdoors that provide a channel for Chinese regime hackers.

Huawei is the Communist Party’s “spear,” Wang said. “It carries the responsibility for comprehensively purchasing and stealing [foreign] technology.”

Wang predicts that as the pernicious nature of the Huawei model becomes more apparent to foreign markets and governments, it will face increasing backlash for its actions. This has been prominently reflected in the recent arrest of CFO Meng Wanzhou by the Canadian authorities for her company’s alleged violation of U.S. sanctions against the Iranian regime.

The Chinese regime has reacted strongly to Meng’s arrest, detaining several Canadian citizens in China and staging high-profile diplomatic protests. It has encouraged a boycott of Canadian apparel company Canada Goose among the Chinese people. According to Wang, this shows how much the CCP regime values Huawei for its utility in gathering intelligence and expanding its global influence.

Phases of Expansion

Chen Lifang, a board member and senior vice president of Huawei, said in a speech given before new Huawei hires last April that China still lags decades behind the United States in many technological fields.

“In precision and smart instruments, and test equipments, the gap is bigger … for all testing devices, we rely on imports,” Chen said. “As for equipment banned by The Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies, our comrades who work on the hidden front have to take the risk and smuggle them.”

According to Wang, Huawei has planned three phases to catch up with the developed countries.

In the first phase, during the 2000s, Huawei copied the software of Cisco, an American multinational technology conglomerate, and sold its system for less than half the original price. Cisco sued Huawei, but strong CCP regime backing meant that the American company could hardly succeed in court.

Meanwhile, Chinese propaganda promoted Huawei as a patriotic enterprise and claimed that using Huawei products was patriotic.

The second phase saw Huawei expand its business overseas while disregarding international laws and regulations. Huawei’s main competitor in this stage was ZTE, a state-owned telecommunication company and second biggest telecoms equipment manufacturer in China.

“We struggle very hard to compete with Huawei in Africa,” Lu J., a ZTE senior project manager, told The Epoch Times. His full name is withheld to protect his identity. According to Lu, both Huawei and ZTE use bribes in the global market, but Huawei is willing to give more. “They are very generous.”

Huawei and ZTE have another advantage not available to American companies.

The CCP regime funds infrastructure projects in other countries. Part of the conditions for taking part in this development is that the host country has to install Chinese-built equipment. This has resulted in Huawei and ZTE enjoying a big market in Africa, South America, and other developing regions.

Apart from doing business in normal countries, both Huawei and ZTE were found to have sold equipment to rogue regimes like those of Iran and the Afghan Taliban, as well as other targets of U.S. sanctions. Being a state-owned company, ZTE left a paper trail in its dealings with Iran, but so far there’s no documentation to directly link Huawei with Iran.

The third phase entails the further development of the CCP’s plans, from forcing foreign companies in China to hand over their technology, to recruiting overseas experts and scientists to work for Chinese companies.

“As a private company, Huawei looks independent. By investing in the institutes in Europe and North America, and aiding the universities, it receives technology from them,” Wang wrote.

In addition to setting up cooperative programs with foreign universities and institutes, Huawei also founds research centers overseas that can benefit from cutting-edge technology produced locally.

“Some CCP military experts can even pose as Huawei employees, and receive training at European and American universities,” Wang said. “Huawei’s equipment plays a key role in the Party’s cyberattacks.”

Human Costs

In recent years, there have been many reports about Huawei employees dying from suicide, overwork, or being fired on account of age or sickness.

“Huawei emphasizes a wolf culture,” Wang said. “It lays off employees over the age of 35 en masse.”

Xie Ting, a young widow, published a long post on Dec. 25, 2018 to mourn for her husband Qi Zhiyong, a 36-year-old Huawei engineer in Kenya who died of overwork.

Xie said Qi wasn’t allowed vacation for 22 months straight.

“One week before the death, he sent me a WeChat message and said might not finish the network cutover [upgrade]. Two days before he died, he worked day and night,” Xie said.

After Qi died, Huawei refused to compensate Xie and her two young children, both of whom are under the age of ten.

“The Huawei Human Resource manager in Kenya, representative in Kenya, and human resources director at the Huawei headquarters told me that I’m welcome to file a lawsuit for compensation,” Xie wrote. “How can a single mom have the money, time, or energy to sue such a huge multinational conglomerate?”

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