Huawei Hoo-hah
I rarely come up against a problem I cannot conclude on if not have a preferred solution for. As the expression goes, not always right, but never in doubt. I have just found one that completely confounds me. I know its a big deal, but I cannot for the life of me see an easy answer that doesn’t sound totally crazy. The problem is the building and recently ripened problem of what to do about Huawei, the Chinese telecomm behemoth that is stomping around the world in breakneck speed.
Huawei is a thirty-year-old company that is a “private” company supposedly owned by its employees. That ownership is held by the Chinese trade union representing the bulk of its workers. Let me think about that, oh yeah, a trade union in a communist country is probably another name for the central government of China. OK, now that makes sense. That employee population would be about 188,000 employees worldwide. That puts Huawei in the the ranks of big global employers, it does not make the top 50 (it ranks 72 on Fortune’s worldwide company list). It doesn’t even make the top 10 in China, nor is it even the top telecomm employer in China. But here’s the mindblower, 76,000 of those employees (a whopping 40%) are in R&D. They spend $13.8 billion on R&D, which pretty much puts them ahead of VW, Toyota, Samsung, Intel, Microsoft, Google and all the Pharma-dudes.
They are easily the largest telecomm equipment manufacturer having eclipsed Ericsson seven years ago and last year beating out Apple for the number two smartphone maker behind Samsung. Their growth trajectory makes everyone else’s in the space look anemic. They are the quintessential Chinese quasi-sovereign company with world conquest as their only and ultimate goal. Least you think that is a conspiracy-theorist (one of which I am not) statement, let’s use Huawei’s founder and leader’s words precisely. That would be Huawei founder Ren Zhengfei. When the U.S. last year passed a defense bill that prohibited the use of Huawei products and then a Trump Executive Order that caused the Commerce Department to put Huawei on the no-fly list for U.S. companies banned the likes of Google and Microsoft from working with them (meaning no more Android updates) Ren calmly explained that “in terms of 5G technologies, others won’t be able to catch up with Huawei in two or three years. We have sacrificed ourselves and our families for our ideal, to stand on top of the world. To reach this ideal, sooner or later there will be conflict with the US.”
It can’t be much clearer than that unless you bomb Pearl Harbor. Now, as much as I hate to endorse anything Trump does, the one thing I tend to believe needs to be sternly handled (not necessarily exactly as he is doing, but handled nonetheless) is the commercial and trade relations with China. The one-sided nature of this trade relationship would be hard to deny and may have made sense when China was emerging, but now that it is 66% the GDP of the United States and in the clear number two spot almost 3X Japan, that must change. Huawei has the added issue that control over a key strategic resource like telecomm that “infects and connects to” all aspects of 21st Century human existence is pretty far-reaching and threatening.
So, this has been a building issue for two years and why is this the day that I wigged out about it all? I saw two simultaneous reports. Huawei announced that they have cut a deal with Russia (a.k.a. Putin) to install 5G throughout Russia. You just know Putin, Mr. KGB, is not taking on that kind of high-profile infiltrating deal unless he is getting something big in return. I’m thinking he gets to peak at all the global (especially U.S.) data Huawei’s global network can scrape up. I can’t swear that the Chinese will give Russia everything, but you better believe he will get far more than we want him to. And a Sino-Russian alliance is hardly a new thought either, if we are talking about world domination.
The second report was perhaps the biggest shocker. Google announced that it believed that the U.S. government banning U.S. companies form dealing with Huawei (i.e. not letting Google update the Android platform code) presented a national security threat to the United States. I got that report form the Financial Times, but I didn’t get enough details yet around the logic of the claim other than what’s bad for Google is bad for the country.
What is Google afraid of? Huawei has threatened for years to deploy it’s own proprietary software platform. That would effectively put a knife in Google’s Android platform as the Huawei 5G system becomes ubiquitous. It wouldn’t do Apple much good either. This new OS player could well become the undisputed standard in record time since Huawei currently is installed in one third of all worldwide mobile users. Boom! Telecomm game over. And here’s the nastiest part of this story. Guess what patents Huawei has already filed around the world. Yep, their own proprietary OS patents. And guess what they call it? Ark. Boom! The biblical end of the world as we know it. You can’t make this shit up.
So, I am at a loss. Who do we listen to? Do we trust the U.S. Government under the leadership of dim-witted Trump and his merry band of idiots in the cabinet? Or do we trust Huawei and the Chinese government that they will not Big Brother us into oblivion? This one is clearly not about me or my wife. I don’t think it helps my kids much and I know it changes the world for my grandkids. What to do? Hoo-ah Huawei, what a Hoo-hah.