Time to face rise of Smart China’s innovation power, says Huawei

Huawei Technologies Australia Chairman John Lord AM has used a speech delivered at the National Press Club in Canberra to try to dispell what he classed as myths around the way the Shenzhen-based firm operates, warning his audience also that “there is no doubt more Huaweis are coming, we can’t pretend the rise of smart China isn’t happening.”

The company, which has been the subject of repeated skepticism on the part of some Western governments, including Australia, during major tender procedures, operates in 170 countries, generating a global revenue approaching US$100 billion per year.

Most recently, rumours surfaced around a potential ban on Huawei in terms of telco vendors being considered by the Coalition government to submit tenders for the construction of 5G mobile networks.

qqqq“We lead the global patents for 5G technology and will spend US$700 million this year alone on 5G development. Australia shouldn’t miss out on this world-leading technology,” said Lord.

“In saying no to one of the leading 5G suppliers in the world, what are we doing? This is not just a tough political decision. This is a long-term technology decision that could impact our growth and productivity for generations to come.”

“As Huawei’s other independent directors John Brumby and Lance Hockridge and I stated in our letter to MPs last week, Huawei is the world’s number one telecom infrastructure provider, working with 45 of the top 50 international telecom operators, including Vodafone and BT in the UK, Telus in Canada, Spark in New Zealand, and Telefonica and Deutsche Telecom across Europe,” Lord added. “These global giants rely on our technology and employees for their business survival.”

He emphasized that carriers in Australia hade been using Huawei equipment for about 15 years. “There has never been any issue that could affect national security. 5G is a natural evolution from 4G, just like 4G was for 3G.”

“Of course there will be great improvement and changes but the network fundamentals do not change at all. So the question is, if Huawei can deliver 4G to Australia already why can’t it do 5G? We know the bar is higher for us because of our Chinese heritage,” Lord said.

In addition, Lord said that both the UK and Canada, Huawei had set up and run, at its own cost, government-endorsed evaluation facilities using security-cleared testing personnel.

“We are progressing a similar solution for New Zealand. we are also creating a briefing centre and evaluation centre in Brussels for anyone to use,” he said. “The UK government, like authorities in practically all the 170 countries where Huawei operates, are worried about cybersecurity threats. Huawei shares these concerns. With traditional British pragmatism, however, the UK government, along with Canada and New Zealand have chosen to check, rather than speculate.”

Global supply chain

“Huawei is Chinese because we are headquartered in China. But our products are made up of components from all around the world, as are all our competitors’ product,” Lord pointed out.

“When Huawei was excluded from the NBN, Alcatel Lucent, now Nokia, became the sole supplier of the fibre technology product GPON. That product is manufactured barely a kilometre down the road from Huawei’s facility in Shanghai,” he added. “Our supply chains are global, our production lines are similar. Huawei or no Huawei, much of the 5G equipment will continue to be made in China.”

Lord said for too long the company had been reluctant to be loud and boastful in public, and hesitant to engage its detractors in debate. “We have come a long way in opening up and talking publicly since I first joined the company but we haven’t come far enough,” he added. “[But] in the end mud sticks so it is time to speak out.”

Myth 1: We get cheap loans or lines of credit from Chinese banks. Wrong, in fact 80% of every dollar of our financing comes from non-Chinese global banks, two of these are Australian banks.

Myth 2: We have a communist party cell that runs Huawei. Yes, there is a communist party branch in Huawei, as there is one in Walmart, Nokia, Samsung and I assume the BHPs and Rio Tintos and any other large company operating in China, it’s the law. In fact three out of four foreign joint ventures in China have a branch. But that branch has no say in our operations. It meets in non-working hours and looks after staff social issues and activities. It has nothing to do with the management of company and is run by a retired employee of the company.

Myth 3: Under Chinese National Intelligence Law, Huawei has to cooperate and collaborate in intelligence work. The law actually contains safeguards that discharge individuals and organisations from providing support that would contradict their legitimate rights and interests. And that law has no legitimacy outside China. We obey the laws of every country in which we operate in. In Australia we follow Australian laws. To do otherwise would be corporate suicide.

Myth 4: The UK Government regrets having Huawei in the UK. I think George Osbourne, the then UK Chancellor best summed it up when said “There are some western Governments that blocked Huawei from making investments, not Britain, quite the opposite” and more recently The UK Governments National Cyber Security Centre’s “on the record” support for Huawei lead to the headline “UK cyber security agency sticks with China’s Huawei..” in the UK’s Daily Telegraph.

Myth 5: Huawei is asking to do something here that China won’t allow foreign companies to do in China. False, Nokia and Ericisson are both undertaking 5G work in China. In fact in April this year Nokia won a big contract with China Mobile for 13 city metro & 2 provincial backbone networks which will form part of China Mobile’s 5G build.


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