Huawei founder's NZ interview carefully chosen

New Zealand media the first to interview Huawei president Ren Zhengfei at a press event in Wellington

A decision by Huawei founder and president Ren Zhengfei to use a visit to New Zealand to speak to the media for the first time is a sign the Chinese technology giant realises it needs to open up, analyst firm Gartner says.

Ren, 68, had never previously consented to media interviews inside or outside of China, but yesterday fielded questions from a handful of journalists at Wellington's Museum Hotel, on topics ranging from his personal view of China's human rights record to a rumour he will soon retire.

Brisbane-based Gartner analyst Geoff Johnson said Huawei would have chosen to hold Ren's media debut in New Zealand to mitigate the consequences of any public relations disaster.

Though it would not allay United States' suspicions about the company, which have seen Huawei shut out of US government contracts and denied permission to acquire US firms, Johnson said he was impressed to see the briefing happen.

"He is keenly aware of the need for communication, particularly on security issues. If he had to open up, where is a safer place to open up?"

Speaking through a translator, Ren said Huawei's relations with the Chinese government, were no different to those that might exist between a New Zealand firm and the New Zealand government.

Ren was an engineer in the People's Liberation Army, prior to founding Huawei in Shenzhen in 1987. He said yesterday he joined the Communist Party in 1978 at a time when it was expected all "exceptional people" would do so.

"At that time my personal belief was to work hard, dedicate myself or even sacrifice myself for the benefit of 'the people'. Joining the Communist Party was in line with that aspiration."

Ren said the human rights situation in China had been improving "step by step continuously".

"The situation in that area today is different from what we saw 30 years ago. Of course, since the western world has gone through several hundred years advancing human rights, in their standards there is still big potential and room for China to further improve the human rights situation.

"However, for people like myself who went through the cultural revolution and all those complicated times, I think China has gone through tremendous progress. Without such progress there would be no possibility for me to sit here today and talk with all of you," he said, adding, "I believe the future will become better than today".

Asked whether he believed labour rights were sufficiently protected in China, Ren said "excessive protection of labour rights might drag China down into some of the difficulties that we are seeing in Europe." China had to avoid creating a European-style "welfare society", he said.

Telecommunications Users Association chief executive Paul Brislen, who attended the briefing, said he sympathised with the difficulties Huawei faced disproving security-related concerns and Ren did not appear perturbed by being asked about human or labour rights.

He nevertheless found Ren's comments on the latter intriguing. Conditions in Huawei's factories appeared great if you were Chinese, but awful if you were a westerner, Brislen said. "If China moved too far the other way, it could end up like Europe where people 'sit around all day drinking wine and not actually working' - that seemed to be the implication."

Ren appeared less austere towards the end of the briefing when he joked that he would open a bottle of champagne when Huawei no longer needed him.

"My life aspiration is to open a coffee shop, or maybe a restaurant, and then have a farm of my own." These he would be able to run with more autonomy than he did Huawei, he said.

Huawei signalled last year that it aimed to triple its revenues to US$100 billion (NZ$120 billion) by 2022 by expanding into the information technology services market, for example by providing infrastructure for cloud computing. That might bring it into new competition with US multinationals such as IBM and Hewlett-Packard.

Ren, who owns 1.42 per cent of the company, said Huawei might turn over US$40b this year and US$70b by 2017. Huawei would concentrate on evolving its internal structure during the next five to 10 years, rather than contemplate a public listing, he said.

Until now, Huawei had been very much centrally-controlled, he said. "The future model is to give the biggest say to our local teams who are closest to our customers and empower them so they have flexibility in interactions with customers. The headquarters or corporate functions will change into a more supporting and service function.

"We think that is going to be a very challenging transition and we are prepared to spend the next five to 10 years to complete it," he said.

Who is Huawei?

Huawei is the world's second largest telecommunications equipment manufacturer after Sweden's Ericsson and the third largest manufacturer of smartphones after Apple and Samsung. It turned over US$35b last year and employs more than 144,000 staff, between 30,000 and 40,000 of whom Ren said were now non-Chinese nationals.

The company earned two-thirds of its revenues outside of China last year but has been largely shut out of the US market because of distrust. In October, the US Congress' intelligence committee advised US companies not to buy from Huawei if they cared about intellectual property, customers' privacy or the national security of the US.

The Australian government banned Huawei from supplying equipment for its National Broadband Network a year ago, reportedly in retaliation for hacking attempts blamed on Chinese interests. But Gartner's Johnson said Australia's opposition coalition had signalled it would let Huawei compete to be a supplier for its alternative network if it won this year's federal election.

Huawei is a major supplier to 2degrees, Vodafone and Chorus in New Zealand.

Ren suggested "jealousy" might be a factor behind the US disapproval. As Huawei did not supply any key telecommunications equipment to US carriers or any equipment to the US government, it could not be responsible for any security issues there, he said.

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