The founder of Huawei has said there is no way the US can crush the company. Now on BBC World News Ren Zhengfei speaks exclusively to Karishma Vaswani, in his first international interview since the arrest of his daughter, the company’s chief financial officer. It’s one of the world’s leading telecommunications companies, with annual sales last year in excess of 100 billion dollars. But now its founder Ren Zhengfei is facing the battle of his life. As China and the US face off in an increasingly ugly trade war, Huawei finds itself at the center of the storm. According to the indictment in 2012, Huawei began a concerted effort to steal information about a robot that T-Mobile used to test mobile phones. The United States is pressuring its allies to shun Huawei’s products, claiming that the company is an arm of the Chinese government. But for Mr. Ren, this is also a personal fight. His daughter has been arrested in Canada. and is facing extradition to a US court. Talking exclusively to the BBC, Ren Zhengfei claims that the US actions are politically motivated. There’s no way they can crush us. The US is constantly hurling accusations against us, finding fault with us, but this pushes us to make our products better. Huawei’s success has become the prism through which the US and its allies are viewing China’s rise. At the core of this is a simple but critical question. Is Huawei truly an international company operating on the global stage, or is it very much a product of the Chinese Communist system? Founder Ren Zhengfei tackles this question and others in this special edition of Asia’s Tech Titans. Ren Zhengfei has only ever wanted one thing. To build a global company in China that could rival the best in the world. And that is exactly what he has done. Mr. Ren started Huawei with just three staff and two and a half thousand dollars in Shenzhen, one of China’s special economic zones. When I first started out 30 years ago, the communications industry was on the brink of enormous changes, changes equivalent to thousands of years in the history of mankind, all in the span of three decades. Back then, we didn’t really have any telephones. The only phones we had were those hand cranked phones that you see in old World War II films. We were pretty undeveloped then. Huawei started out by making simple equipment for rural markets. Instead of spending the money we earned, we invested it back into the business, making more and more advanced equipment. We were lucky China was developing its network industry on a big scale at the time. That’s how we found a market for our goods. If we tried to start a business today, I don’t know if we would be successful. We worked for survival rather than for ideals. How could we possibly have ideals then? Our priority was to survive. Today, Huawei is the top telecoms network equipment seller in the world. How did you do this? I am an ambitious man. If someone can focus on one thing, then they will definitely succeed. I was focused on communications technology. If I had focused on raising pigs, I might have become a pig expert. If I had focused on making tofu, I might have become the king of tofu. Unfortunately, I chose communications. This industry is very challenging. We did this without really understanding just how high the barrier to entry was. But we started anyway. And there was no turning back. Because if we pulled out, then we would have lost everything. I had spent all of my initial investment, and would have ended up begging on the streets, so we had to keep forging ahead, one step at a time. Today, Huawei has sprawled out to become a global tech giant. I had a chance to see the scale of that growth when I arrived on Huawei’s newest European-style campus in Shenzhen. This is one of the three campuses Huawei has here. They have their own train. This campus alone is the size of 345 football fields. Wow. I cannot believe they built this in the middle of an industrial city. Around the world, it now has over 180,000 workers, and it’s done all of this in just three decades. By any standards, that’s an astronomical rate of growth. But it’s not just about how big Huawei has become. It’s gone from a company aspiring to be Apple to one who is selling more smart phones than Apple. And it’s been able to achieve this, Mr. Ren says, because it’s a privately owned company, not at the mercy of shareholders, so it’s free to decide its own vision of the future. Why have we succeeded while other companies found it difficult? Publicly listed companies have to pay a lot of attention to their balance sheets. They can’t invest too much. Otherwise, profits will drop and so will their share prices. At Huawei, we fight for our ideals. We know that if we fertilize our soil, it will become more bountiful. That’s how we have managed to pull ahead and succeed. Every year, Huawei invests up to $20 billion in R&D, putting it in the top five companies for such an investment in the world. Whilst some American telecom giants were cutting jobs and closing labs, Huawei pumped billions of dollars into new areas of research. Li Peng Fei is an engineer at Huawei. His team works on what the company calls fundamental questions, areas of research that don’t have an immediate outcome. For my research, it is not directly involved in profit. Most of my work is about fundamental research. In the US, my friends who work in Apple, who work in Google, they work really hard, and they have a lot of freedom on their research. And I basically have the same, similar freedom and the similar environment like they do have. We Chinese people, we are trying to develop, we are trying to be better. Right? We are learning, and we are trying our best. But some think it’s not just investment into R&D that’s enabled Huawei to pull ahead of its rivals. Both sets of charges expose Huawei’s brazen and persistent actions to exploit American companies and financial institutions, and to threaten the free and fair global marketplace. The US Department of Justice has charged Huawei with intellectual property theft, alleging that it stole trade secrets from American firm T-Mobile, deliberately. The Department of Justice has put forward charges saying that Huawei stole technology from an American company. Do you think that’s fair? I trust the US is a country ruled by law, so everything will ultimately be settled by the law. But sometimes I’m also very happy. The US is the world’s most powerful country, and their senior officials are going around the world talking about Huawei, including places where we have not launched any advertising campaigns, and people didn’t know about us. But because of this, people everywhere now know of Huawei. This is a huge advertisement for us at a very cheap price. Cisco, Nortel, Motorola, they have all accused Huawei of stealing their ideas, stealing their technology. The United States is trying to say Huawei can’t be trusted. What do you have to say about that? In actual fact, many of our technologies are already far ahead of those by western companies, not just in 5G or optical switching or our chipsets. The number of technologies in which we are leading is huge, and these are complex technologies. The charges that the US has made against Huawei are fairly marginal. They are not enough to say that Huawei has become what it is today by stealing from the US. Today, we have many things that the US doesn’t. How can we steal what they don’t have? Still, the pressures on Huawei are growing, and Mr. Ren is not just fighting for his business. His family is now involved as well. The DoJ has charged Mr. Ren’s daughter and Huawei’s Chief Financial Officer, Meng Wanzhou, with bank fraud and accused her of conspiring to violate American sanctions on Iran. What is it like as a father to see your daughter in such a difficult situation? When she was detained, as her father, my heart broke. How could I watch my child suffer like this? But what happened has happened. What can one do? We can only depend on the law to solve this problem. I think this hardship is a valuable opportunity in life for her. Going through such a big event will give her wings for her future growth. I should thank the US government for giving Meng Wanzhou a strong set of wings so she can fly higher in the future. I believe that. Was she a successor that you were grooming, that you were hoping to see her become the CEO one day? She could never become my successor because she has no technical background. I feel that I shouldn’t see my children’s trials entirely through a father’s eyes. I should also see them flying strong and free. Children must have their own character and find their own way. All my children are strong-willed, hardworking, and drive themselves to excel. As their parents, we cannot demand that they stay meekly by our side forever. We think that their personal development is more important. Despite this huge personal setback, Huawei is pushing ahead with a project where it is leading the world, 5G technology. By many accounts, Huawei is thought to be at least a year ahead of its rivals on this front. 5G will herald the start of truly virtual networks and hyper-connectivity between everything you can think of, all of which is designed to make our lives easier and more automated. But the worry is whoever controls the infrastructure behind this technology could potentially control every aspect of our lives in the future. Zhu Peiying is Huawei’s head of 5G wireless research and says that fears of vulnerabilities in 5G are unfounded. From a technology perspective, 5G is probably more secure than 4G, the previous generation. In the sense that we have built in some more sophisticated technologies. The security itself needs cooperation from the manufacturer and from the operators who run the networks and from the government. How much of an advantage is it to be ahead of your competitors when it comes to 5G? What does this mean for you? We will probably get more footprint, serve more customers, and it is beneficial for both our customers in terms of operators and our consumers. You know, at its most basic level, 5G technology is about connecting everyday items, like my toothbrush, to the internet. Every time I brush my teeth, data is collected and analyzed, but at its most sophisticated, it’s about everything in entire cities talking to each other, from driverless cars to building temperature to how fast our public transport is. And it’s already starting to materialize, right here in China. In an old neighborhood in Shenzhen, Huawei is building the framework for the internet of the future. By next year, China will have 5G services in several cities and Huawei is already building the infrastructure for 5G in other Asian countries. It’s amazing, isn’t it? This is 5G, going up in front of my eyes. In the next 20 or 30 years, we will see a great technological revolution, where we will become an information society, automated by artificial intelligence. In the era of cloud and AI, we will see explosive growth in data, bursting forth like a tsunami. This data needs the support of the most advanced equipment possible. I don’t think 5G or any other form of data transmission existing today will truly meet the pinnacle of people’s needs. I believe there are more profound needs that still need to be addressed. Right now, human society is only in the early phases of the massive change that lies ahead. We still have a very long way to go before we can deliver faster, more real-time, more accurate, and more affordable information services. But Huawei’s 5G ambitions have made some countries nervous. Australia, along with the US, has banned Huawei from building the infrastructure for its 5G networks because of security concerns. Whoever controls the 5G infrastructure has the potential to know a lot more about our lives. Tom Uren helped form the government’s policy on it. He says Huawei is “just too big a risk”. There has been a lot of focus on Huawei because they are building critical communications networks that will be really super important to the future. In the last several years, the Chinese Communist Party has been a lot more coercive, and they have passed laws that basically compel companies and individuals to assist in intelligence efforts, and this really crystallizes worries that companies like Huawei will be forced to help them conduct espionage or perhaps other things. These laws allow the state to ask citizens and organizations for information, and they have to comply. They have no choice. The fear is that Huawei will build a backdoor into its 5G technology, allowing the Chinese state access to private data. The Chinese government has clearly said that it won’t ask companies to install backdoors, and Huawei will not do it either. Our sales revenue is now hundreds of billions of dollars. We are not going to risk the disgust of our country and our customers all over the world because of something like that. We will lose all of our business, and then we would not be able to repay the banks. I’m not going to take that risk. I said I would shut the company down, also to express a kind of determination. We will not do this. To add to the suspicion, there is also Mr. Ren’s links to the Chinese military. Before founding Huawei, he was an engineer in the People’s Liberation Army. I was a very low-ranking officer in the People’s Liberation Army. After leaving the army, I had no connection or interaction with it. I was not the high-ranking officer the US has made me out to be. Please don’t think that Huawei has become what it is today because we have special connections. Even 100% state-owned companies have failed. Do good connections mean you will succeed then? Huawei’s success is still very much due to our hard work. There has been no conclusive evidence that Huawei has been helping the Chinese government to spy on other countries, but concerns that it could have been enough for the US to pressure its allies, including the UK, to stop doing business with Huawei altogether, while Australia has outright banned the use of Huawei equipment in its 5G networks, the UK and New Zealand are leaving the door open for now. Huawei’s global cyber security program is run in London by John Suffolk. He used to be the UK government’s Chief Information Officer and understands the level of suspicion targeted at the company. The reality is we are Chinese headquartered company. We are very proud of our Chinese heritage and our Chinese roots. Not everybody understands you know the modern China, not everybody is in favor of the modern China. Some will even see China as a threat, as they saw Japan in the car industry in terms of the ’70s and ’80s. We have to ignore that. We have to continue to satisfy what our customers want. We have to continue to be open and transparent, and then businesses will make the decision based on who will provide them with the greatest long-term value. What kind of impact would it have on your business if the US is successful in getting many of its partners in the west to shut your equipment out? If the lights go out in the west, the east will still shine. and if the north goes dark, then there is still the south. America doesn’t represent the world. America only represents a portion of the world. But security concerns continue to keep Huawei under scrutiny. In particular, the company’s relationship with the Chinese communist party. Under China’s modern facade is a system that’s still very different from what the west knows. You have to have a Communist Party Committee in your company in China. It’s the law. Most big CEOs are members of the party, even Alibaba’s Jack Ma. These political connections are necessary to do business here, and many just see them as a formality, but they do raise questions about the independence of Chinese companies. Still, you have to ask yourself, if you were running a company in China, how else would you operate? According to Chinese law, all companies in China, including Chinese and foreign companies, must establish a Communist Party Committee, and we must all obey the law. In fact, before we established a party committee, Motorola, IBM, and Coca-Cola had already established theirs. The Communist Party Committee at Huawei serves only to educate its employees. It is not involved in any business decisions. I think all companies obey their own country’s laws when they need to, so this happens for all telecommunications companies, it happens in the West, the difference is that in the west, there is independent courts and judiciaries, and companies can actually contest those decisions. In China, there is not the same independence and rule of law. I find it very hard to believe that a Chinese company can operate totally independently of the Communist Party. If the Communist Party thinks that it needs to do something to protect itself, it will. Can you see how difficult it is for many people around the world to believe that you are free of influence from the Chinese Communist Party? Many countries may choose not believe to us or work with us, but the world is big. There are still many countries that welcome us. We have already won 31 5G contracts and shipped over 30,000 5G base stations People are increasingly aware of our advanced products and are more willing to accept us. Let the facts speak for themselves. We cannot depend on speculation. It’s not the law. It’s been a long journey for Mr. Ren, whose life’s work of building Huawei has in many ways mirrored the rise of China. 30 or 40 years ago, I did not study in the West. Many of my good friends went to the US and Canada to study. This is because I served in the military. I had no ID card, and thus had no right to do so. I missed that era. After they came back to China, my friends told me what a supermarket was. I had no idea back then. You could imagine how little we knew of what a market economy was at the time. I was someone who had been in the military all my life at the time, used to doing exactly what I was told. Suddenly, I began to work in a market economy, engaging in product transactions. I was at a total loss, so I too suffered losses. I too was deceived, and I was cheated, but I had to pick myself up because I had a wife and a child, and I had to provide for them. It’s that steeliness shaped from past experiences that has helped Mr. Ren steer his company through an unprecedented level of global scrutiny. I object to what the US has done. This kind of politically motivated act is not acceptable. The US likes to sanction others whenever there’s an issue. They’ll use such methods. We object to this. But now that we’ve gone down this path, we’ll let the court settle it. Despite the current level of skepticism attached to Huawei, he’s still able to see this as a mixed blessing. There is no impact on Huawei’s business due to Meng Wanzhou’s loss of freedom. In fact, we are growing even faster. So they got Meng Wanzhou. Maybe they arrested the wrong person. They may have thought if they arrested her, Huawei would fall. But we didn’t fall. We are still moving forward. For Mr. Ren, moving forward is not merely an option. For Huawei, it’s the only way to survive.