By Katrin Buechenbacher
The founder of China’s Huawei Technology Ltd., the world’s third-largest smartphone maker behind Samsung Electronics and Apple Inc., said that China and the U.S. would not engage in a trade war.
“China and the United States are highly dependent on trade and will not have strong conflicts,” Ren Zhengfei, Huawei’s CEO, said in a speech shared to his employees in an online communique on July 4.
The U.S. lawmakers aimed directly at Huawei and their direct competitor ZTE when pushing a new rule that restricts Chinese telecommunications firms from selling their products in the U.S. in April 2018. With the measure, the US communicated that they don’t trust Chinese tech. Security concerns aside, the trade war is also about the world’s two largest economies battling for tech leadership.
In another report that could indicate the impact of trade tensions, lawmakers have also asked the government to closely examine the wireless carrier Sprint’s proposed merger with T-Mobile due to the former’s ties to the Chinese government, according to a report from Bloomberg. Sprint’s majority shareholder is Japan’s SoftBank, which has worked with Chinese telecommunications giant Huawei.
However, Ren displays an optimistic attitude towards the rising tensions, arguing that the two countries are “never going to go against each other.”
He further promises that Huawei plans on buying 50 million microchips from the American telecommunications firm Qualcomm this year while increasing R&D investments by 20 to 30 percent to up to $4 billion and long-term strategizing for the future.
“We have sufficient funds and sufficient profits,” Ren assures. It will take time for R&D investments to bear fruit, he said.
“Even if 100 million dollars are lost each year because only 50% of research projects succeed, it cultivates a large volume of talent we urgently need in the future.”
It’s not about chasing for short-term profits on the stock market, but making basic research a priority to be able to benefit in the long run, Ren urges.
According to Ren, the tech gap between the U.S. and China will not disappear for another 20-60 years. It is a period during which a monopole mindset will dominate the world order. “China's biggest weapon is the domestic consumption of 1.3 billion people,” he says.
The Huawei executive voiced criticism over U.S. president Trump’s harsh policies against Chinese tech firms, saying that even if China would lead the world economy, they would never use that power position to “blackmail society or other countries or companies, but would treat others “fairly and without discrimination.”
The US commerce department partly and temporarily lifted its ban on ZTE after the company had paid a $1 billion fine, allowing them to support their deployed equipment and services on the U.S. market, while Huawei still suffers from the ban.