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Huawei, a weapon for Chinese power?



Huawei, a weapon for Chinese power?

Sat, 18.05.2019

Washington banned US telecom networks from acquiring equipment from foreign companies regarded as risky, a measure aimed at Huawei. (Keystone)

Chinese Range Jungfei, Army technician, founded Huawei with just $ 5,000, according to the legend. But 32 years later, the company is at the heart of the conflict between China and the United States that is competing for global technological domination.

How has the meteoric rise of this company happened and how will it secure its future as President Donald Trump tries to stifle his expansion in the United States?

What is Huawei?

Founded in Shenzhen in 1987 in South China, Huawei is a telecommunications giant, the world's largest network provider and the second-largest smartphone manufacturer behind Samsung and Apple.

Attending 170 countries, he claims to have nearly 190,000 employees and in the year 2018 he has a turnover of over $ 100 billion.

Its geographic expansion and heavy investment in R & D have positioned it as one of the major players in the 5G, the next generation of ultra-fast mobile Internet.

How did Huawei reach this size?

Critics blame the Chinese government for fueling Huawei's success by bringing it at arm's length.

But Ren Jingfei, now 74, also had the chance to launch his company as Chinese factories began to flood the world and the dawn of the telecom explosion. Shenzhen was then a quiet fishing village.

In 1997, Huawei went abroad, focusing on Southeast Asia, Africa and Eastern Europe, ignored by other actors who avoided him to face Western competitors, allowing him to take market share and invest in developing more sophisticated products.

Why is the US worried?

Wenfeng's military background, belonging to the Communist Party, and Huawei's opaque culture largely fueled suspicions of Chinese state control over the group, and the conviction that no company in such a strategic sector could reach such heights without Beijing.

With the growth of the Huawei market, the United States has begun to worry that Chinese security services will use Huawei's networks for espionage or cyber attacks.

Washington made a personal arrest warrant in December at the request of US justice, Ren Zhengfei's daughter and financial director, Meng Wanzhou, suspected of violating US sanctions in Iran.

Who owns the business?

Huawei says the shares are owned by its employees, but Christopher Balding and Donald Clark, American scientists who have got rid of available internal documents, have been able to find that this is not the case.

According to them, the company is the property of a union with unclear outlines. They ensure that these structures are systematically controlled by the government.

"Huawei can be considered state-controlled," they conclude.

One of the authors even published on Friday that "Huawei is a branch of the Communist Party and actively participates in spying on Beijing."

The end of Huawei?

Washington banned US telecom networks from acquiring equipment from foreign companies regarded as risky, a measure aimed at Huawei.

Fully executed, it will "quickly expose both the company itself and the Huawei customers' networks worldwide," said Paul Trillo, an analyst at the Eurasia Group.

However, he notes that the degree of implementation of this policy is unclear and that commercial realities are likely to lead to the approval of most of Huawei's sales.

"We still do not know to what extent the Trump uses this as a new weapon in its campaign against Huawei (our main postulate) or as a weapon in trade negotiations," the analyst wrote in a note. , (APM)


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