…and More From Huawei…
While we tend to filter statements made by Chinese companies, given a political predilection to aggrandize data that is positive toward the plans of the government, Huawei has certainly been a company that was singled out by the Trump administration as one that represented all that the administration felt was inherently wrong with China and its supposedly one-sided relationship with the US. Much has been said about the validity of claims made against Huawei, but other than a few ‘official denials’ much of the response to those claims from Huawei never reached US news sources. While the US government continues to use Huawei as a rallying cry for almost anything that needs a bit of aggressive sentiment behind it, there is still little proof as to the claims made by the government.
Huawei itself posted what it calls 9 false accusations made by the US government and how it responds to each. Rather than filter through the commentary, we post it in its entirety for review.
1. Huawei provides the cheapest equipment because it is funded by the Chinese government
Huawei pointed out in the statement that any MBA student knows that cheap does not mean a competitive advantage. Telecommunications operators will not buy the cheapest telecommunications equipment without considering quality, safety and other important standards. They want value for money, and Huawei has done this.
One reason is that Huawei has invested a lot of money in research and development. For example, R&D expenditure in 2018 reached 14.3 billion U.S. dollars, more than that of Apple, Intel and Cisco, and 30% higher than the combined R&D expenditure of Huawei’s two largest competitors in the field of network equipment, Ericsson and Nokia. Therefore, Huawei's network equipment is usually smaller and easier to transport and install. At the same time, it is more energy-efficient and lower maintenance costs. The price of the equipment is therefore reasonable.
As for Huawei's funds, it mainly comes from the company's reinvestment income. Huawei also borrows from international banks, and the government subsidy funds are relatively small. In 2018, the amount of government subsidies was only equivalent to two thousandths of Huawei's total revenue.
2. Huawei's 5G equipment is not advanced, and 5G patents lack "relevance and value"
According to data from intellectual property consulting firm CPA Global2, Huawei has the largest number of 5G patents and 5G core patent families. Former U.S. President Trump announced the U.S. 5G plan in April 2019, but Huawei's research began ten years ago. Up to now, Huawei is the only company in the world that integrates the production of 5G mobile phones, 5G base stations, 5G optical fibers, and 5G core network hardware and software. Huawei technology is considered to be 12 to 18 months ahead of other competitors.
3. Huawei steals intellectual property
Huawei is the world's largest manufacturer of telecommunications equipment, with 500 telecommunications operator customers and a cooperative relationship for more than ten years. Huawei does not need to steal the intellectual property rights of others, because it owns a lot of intellectual property rights. Last year, Huawei applied for more than 5,000 patents to the World Intellectual Property Organization. Huawei is the largest holder of 5G technology patents, accounting for about 20% of all 5G patents.
At the same time, since 2001, Huawei has paid more than US$6 billion in intellectual property licensing fees to third parties, 80% of which have been paid to US companies.
4. Huawei does not agree with Western values
In the digital realm, the value is reflected in security and privacy. Huawei attaches importance to these factors as much as US citizens, and may even attach more importance to it than the US federal government. In terms of security, Huawei customers have never encountered major cybersecurity breaches, and there is no evidence that Huawei has been threatened by the Chinese government or other levels. On the contrary, the United States is used to changing digital product data to gather intelligence. Huawei mentioned that the United States signed the US CLOUD Act (Clarification of the Lawful Use of Foreign Data Act) to make it easier for law enforcement agencies to access server data information, regardless of the country where the data is stored.
5. It will be very easy and fast to remove Huawei network equipment
The US State Department stated that the cost of replacing Huawei's equipment in Europe is expected to be only "3.5 billion US dollars." But according to the Daily Mail, the UK’s ban on Huawei’s supply of 5G equipment would cost more than 1 billion pounds (1.3 billion US dollars). An upcoming study by Oxford Economics estimates that the economic impact of banning 5G networks on the UK, Germany, and France may be as high as US$11.8 billion, US$13.8 billion and US$15.6 billion, respectively. These amounts have not taken into account the costs that other European countries will incur.
In the United States, if Huawei’s network equipment is dismantled, it will force about 40 small wireless operators in remote rural areas to scrap equipment worth millions of dollars. Some of these small operators said that the cost of dismantling Huawei’s equipment could lead to bankruptcy. At the same time, American families, schools, hospitals, farms and even small businesses may lose affordable Internet services.
Jeff Johnston, an economist at Union Bank, which provides loans to American farmers, estimates that replacing the existing Huawei equipment in the United States will cost rural operators about $1 billion and will take three to seven years.
6. U.S. activities against Huawei have nothing to do with the Sino-U.S. trade war
Former US President Trump stated in May 2019 that if China and the United States reach an agreement, Huawei may be part of it.
7. It is easy for Huawei to install backdoors in its products
Huawei is the most censored telecom equipment manufacturer in the world. Independent institutions in the UK, Germany and Belgium continue to test Huawei products. Since its establishment in 1987, Huawei's customers have never encountered major cybersecurity breaches. Because of this, customers trust us, and they trust our products. Telecom operators scan their networks 24 hours a day to find anomalies. Any behavior that deviates from the normal pattern will cause alertness sooner or later.
8. Huawei has an unusually close relationship with the Chinese government, and the identity of its owner is "strictly confidential"
Huawei is a private company that is 100% owned by its employees. Our largest individual shareholder, CEO and company founder Ren Zhengfei owns a little more than 1% of the company's shares. Another 99% of the shares are held by the Huawei labor union, which is entirely owned by Huawei employees.
9. Blocking Huawei will not slow down the pace of global 5G deployment
Huawei pointed out that it will be telecom operators that will launch 5G networks, not the US State Department. Operators in the UK, Germany and other countries and regions have made it clear that the blockade of Huawei will delay the launch of 5G networks.
Although there are other 5G equipment suppliers, Huawei's technology is more advanced. In 2019, T-Mobile postponed 5G network business. The American Telephone and Telegraph Company (AT&T) announced that its so-called 5G network speed is lower than 200Mbps, while South Korea’s LG U+ deploys 5G with Huawei technology to provide download speeds exceeding 1.3Gbps.
According to Oxford Economics, preventing Huawei from building 5G infrastructure may cause a country to increase its investment costs in 5G by 8% to 29% in the next 10 years. This may delay millions of people from enjoying 5G services, leading to a slowdown in technological innovation and slowing economic growth.
Huawei itself posted what it calls 9 false accusations made by the US government and how it responds to each. Rather than filter through the commentary, we post it in its entirety for review.
1. Huawei provides the cheapest equipment because it is funded by the Chinese government
Huawei pointed out in the statement that any MBA student knows that cheap does not mean a competitive advantage. Telecommunications operators will not buy the cheapest telecommunications equipment without considering quality, safety and other important standards. They want value for money, and Huawei has done this.
One reason is that Huawei has invested a lot of money in research and development. For example, R&D expenditure in 2018 reached 14.3 billion U.S. dollars, more than that of Apple, Intel and Cisco, and 30% higher than the combined R&D expenditure of Huawei’s two largest competitors in the field of network equipment, Ericsson and Nokia. Therefore, Huawei's network equipment is usually smaller and easier to transport and install. At the same time, it is more energy-efficient and lower maintenance costs. The price of the equipment is therefore reasonable.
As for Huawei's funds, it mainly comes from the company's reinvestment income. Huawei also borrows from international banks, and the government subsidy funds are relatively small. In 2018, the amount of government subsidies was only equivalent to two thousandths of Huawei's total revenue.
2. Huawei's 5G equipment is not advanced, and 5G patents lack "relevance and value"
According to data from intellectual property consulting firm CPA Global2, Huawei has the largest number of 5G patents and 5G core patent families. Former U.S. President Trump announced the U.S. 5G plan in April 2019, but Huawei's research began ten years ago. Up to now, Huawei is the only company in the world that integrates the production of 5G mobile phones, 5G base stations, 5G optical fibers, and 5G core network hardware and software. Huawei technology is considered to be 12 to 18 months ahead of other competitors.
3. Huawei steals intellectual property
Huawei is the world's largest manufacturer of telecommunications equipment, with 500 telecommunications operator customers and a cooperative relationship for more than ten years. Huawei does not need to steal the intellectual property rights of others, because it owns a lot of intellectual property rights. Last year, Huawei applied for more than 5,000 patents to the World Intellectual Property Organization. Huawei is the largest holder of 5G technology patents, accounting for about 20% of all 5G patents.
At the same time, since 2001, Huawei has paid more than US$6 billion in intellectual property licensing fees to third parties, 80% of which have been paid to US companies.
4. Huawei does not agree with Western values
In the digital realm, the value is reflected in security and privacy. Huawei attaches importance to these factors as much as US citizens, and may even attach more importance to it than the US federal government. In terms of security, Huawei customers have never encountered major cybersecurity breaches, and there is no evidence that Huawei has been threatened by the Chinese government or other levels. On the contrary, the United States is used to changing digital product data to gather intelligence. Huawei mentioned that the United States signed the US CLOUD Act (Clarification of the Lawful Use of Foreign Data Act) to make it easier for law enforcement agencies to access server data information, regardless of the country where the data is stored.
5. It will be very easy and fast to remove Huawei network equipment
The US State Department stated that the cost of replacing Huawei's equipment in Europe is expected to be only "3.5 billion US dollars." But according to the Daily Mail, the UK’s ban on Huawei’s supply of 5G equipment would cost more than 1 billion pounds (1.3 billion US dollars). An upcoming study by Oxford Economics estimates that the economic impact of banning 5G networks on the UK, Germany, and France may be as high as US$11.8 billion, US$13.8 billion and US$15.6 billion, respectively. These amounts have not taken into account the costs that other European countries will incur.
In the United States, if Huawei’s network equipment is dismantled, it will force about 40 small wireless operators in remote rural areas to scrap equipment worth millions of dollars. Some of these small operators said that the cost of dismantling Huawei’s equipment could lead to bankruptcy. At the same time, American families, schools, hospitals, farms and even small businesses may lose affordable Internet services.
Jeff Johnston, an economist at Union Bank, which provides loans to American farmers, estimates that replacing the existing Huawei equipment in the United States will cost rural operators about $1 billion and will take three to seven years.
6. U.S. activities against Huawei have nothing to do with the Sino-U.S. trade war
Former US President Trump stated in May 2019 that if China and the United States reach an agreement, Huawei may be part of it.
7. It is easy for Huawei to install backdoors in its products
Huawei is the most censored telecom equipment manufacturer in the world. Independent institutions in the UK, Germany and Belgium continue to test Huawei products. Since its establishment in 1987, Huawei's customers have never encountered major cybersecurity breaches. Because of this, customers trust us, and they trust our products. Telecom operators scan their networks 24 hours a day to find anomalies. Any behavior that deviates from the normal pattern will cause alertness sooner or later.
8. Huawei has an unusually close relationship with the Chinese government, and the identity of its owner is "strictly confidential"
Huawei is a private company that is 100% owned by its employees. Our largest individual shareholder, CEO and company founder Ren Zhengfei owns a little more than 1% of the company's shares. Another 99% of the shares are held by the Huawei labor union, which is entirely owned by Huawei employees.
9. Blocking Huawei will not slow down the pace of global 5G deployment
Huawei pointed out that it will be telecom operators that will launch 5G networks, not the US State Department. Operators in the UK, Germany and other countries and regions have made it clear that the blockade of Huawei will delay the launch of 5G networks.
Although there are other 5G equipment suppliers, Huawei's technology is more advanced. In 2019, T-Mobile postponed 5G network business. The American Telephone and Telegraph Company (AT&T) announced that its so-called 5G network speed is lower than 200Mbps, while South Korea’s LG U+ deploys 5G with Huawei technology to provide download speeds exceeding 1.3Gbps.
According to Oxford Economics, preventing Huawei from building 5G infrastructure may cause a country to increase its investment costs in 5G by 8% to 29% in the next 10 years. This may delay millions of people from enjoying 5G services, leading to a slowdown in technological innovation and slowing economic growth.
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