Commentary: Ren Zhengfei, Huawei’s general musters for a fight

Commentary: Ren Zhengfei, Huawei’s general musters for a fight

The Chinese telecoms magnate is at the centre of the US’s trade war with his country, says the Financial Times' Kathrin Hille.

Ren Zhengfei
Huawei founder Ren Zhengfei, second from left, with Chinese President Xi Jinping at the company’s London offices in 2015. (Photo: Matthew Lloyd/AFP)

BEIJING: When Ren Zhengfei went to America for the first time, he prepared well. With US$10,000 sewn into the lining of his jacket, the founder of Chinese telecoms equipment maker Huawei set off to explore the country he saw as the gateway to the global market for his young company.

It was 1997. Mr Ren, a former People’s Liberation Army officer, was 53 years old, and Huawei just 10.

After first selling foreign telephone exchange switches in China and then reverse-engineering its own, the company was expanding abroad. Mr Ren’s journey included visits to Bell Labs and IBM, where he marvelled at the power of engineering and at modern management methods, and a stop in Las Vegas to wander around the casinos. 

The fact he had managed to carry his hidden cash through US customs unnoticed remained one of his favourite anecdotes much later.

Those memories may now acquire a bitter aftertaste. The US authorities are coming after Huawei with a vengeance. 

Meng Wanzhou, Mr Ren’s daughter and Huawei’s chief financial officer, was detained in Vancouver pending a decision on extradition to the US, where she would face fraud charges for allegedly tricking western banks into violating US sanctions on Iran.

The case, which places Huawei at the centre of the escalating technology brawl between the US and China, is the culmination of Mr Ren’s personal battle to transform his business into a global leader. “We will definitely reach the peak of Everest!” he wrote in a message to staff in January. He added:

Our future is bright, however difficult our path may be.

READ: A winter of discontent awaits after Huawei executive arrested, a commentary

People walk past a Huawei shop in Beijing
People walk past a Huawei shop in Beijing, China, December 11, 2018. REUTERS/Thomas Peter

EARLY UNEASE

Huawei, whose revenues were less than US$1 billion when Mr Ren first set foot on American soil, is on track to hit US$100 billion this year. While the company had only just completed its first export deal, to Hong Kong telecoms operator Hutchison Whampoa, in 1997, it is now the world’s largest supplier of telecoms network gear and the second-largest smartphone brand.

In the US, this meteoric rise triggered early unease. Western security officials allege that Huawei has close ties to the Chinese military and may be helping the PLA spy on the US. 

The US government has blocked Huawei from making acquisitions there, pushed it out of network gear contracts, and now even pushes allies to bar it from 5G contracts. 

Although Huawei has time and again rejected the allegations, staff see their boss as a formidable figure capable of anything. “Making the company what it is today, that was all him. He is dedicated, and ruthless,” says a former senior executive.

LARGER THAN LIFE

Born in 1944 in the poor south-western Chinese province of Guizhou, Mr Ren’s first career was as a technical researcher in the PLA. He says he lost his job during military downsizing in 1982, and ridicules the idea that his military past has made Huawei an enterprise with special ties to the Chinese armed forces today. 

But while Mr Ren likes to describe himself, with self-deprecating humour, as a country bumpkin who initially struggled in business and knew nothing about the outside world, that version is questioned.

“Business was flattish in the first decade, and then things took off like crazy. People suspect that something must have happened to help, but it’s a mystery even inside the company,” says the former executive.

Handout of Meng Wanzhou, Huawei Technologies Co Ltd's chief financial officer (CFO)
FILE PHOTO: Meng Wanzhou, Huawei Technologies Co Ltd's chief financial officer (CFO), is seen in this undated handout photo obtained by Reuters December 6, 2018. Huawei/Handout via REUTERS
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There are signs that Mr Ren received support from the very top. In 1994, he briefed Jiang Zemin, then president and leader of the Communist party. A few years later, Huawei built a first nationwide communications network for the PLA. 

Yet, for many Huawei staff as well as customers, it is Mr Ren’s larger-than-life personality that brought the company so far. 

Colleagues describe a man with only a rudimentary understanding of and little interest in the details of technology leading a workforce of more than 180,000 with iron authority. Although Mr Ren resists being defined by his PLA past, his management style and rhetoric has a distinct note of military discipline — not uncommon for Chinese men of his age.

“This aircraft carrier Huawei which has just set sail needs thousands of heroes to paddle,” he wrote in his note to staff in January, urging them to shake off their weaknesses and shortcomings, so that “we can become a great warrior”.

SACRIFICES AND HARDSHIPS

Employees know that in concrete terms, that means they are expected to make sacrifices for the company — long hardship postings without family and working through weekends — and to face unforgiving demands on their performance. “He will criticise people by name in a room full of colleagues,” says one executive. 

The founder made several senior staff write public apologies or self criticisms, a practice from China’s recent past. For foreign staff, this is hard to swallow. Foreign hires tend to stay at Huawei less than a year. 

“You always remain outside the Chinese core circle, and you are not given the kind of respect you might have been used to at Ericsson,” said a European engineer who left after 10 months. “They want to be seen as one of us, but they will always be different.”

From Huawei’s Chinese staff, however, there are few complaints. Most importantly, Mr Ren leads by example. Several years ago, he kept an appointment with the FT despite feeling unwell. 

As a Chinese medicine doctor performed acupressure on his hand, Mr Ren waved for an aide to place an empty champagne cooler at his feet. “Just in case I have to throw up,” he said with a smile, and then carried on talking.

© 2018 The Financial Times Ltd.

Source: Financial Times/sl

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