A hot potato: A US media report paints an interesting picture of Huawei’s success by corroborating public records that show the company rising above its competitors using around $75 billion in state aid. The company denies these claims, arguing that it owes its success to its aggressive investment strategy that cost them $15 billion in 2018 alone.
Huawei has been facing increased scrutiny and major roadblocks in its quest to do business in the US. The company has been trying its best to secure licenses to continue its dealings with American companies, going as far as suing the FTC and the FCC for allegedly imposing unlawful restrictions that are based on politics as opposed to real evidence.
A new report from the Wall Street Journal claims to reveal that Huawei’s resounding worldwide success over the last few years can mostly be attributed to contributions from Chinese-state lenders. Specifically, the Journal has done the math on grants, tax breaks, and general financial assistance received by the Chinese tech giant and it all added up to almost $75 billion in state-provided financial support.
This could mean that Huawei’s meteoric rise that has seen them close into Samsung’s multi-year dominance in smartphones, for example, isn’t entirely the result of innovation. The company lashed out at the Wall Street Journal immediately after the report was published, arguing that it achieved its success by investing anywhere between 10 to 15 per cent of its annual revenue in research and development over the last 30 years.
Huawei noted the WSJ has published “untruths” about them “based on false information,” explaining that any private company that operates in China and meets certain conditions is entitled to state aid even if it’s based outside of China. And while the Journal says the government support allowed Huawei to save up billions of dollars, the company denies receiving special treatment, further adding that state lending was “immaterial.”
In any case, it looks like Huawei’s battle with the US over allegations that it’s stolen trade secrets and that its equipment is a security nightmare is far from over. The company has denied ties with the Chinese government for years and even accused the US of attacking its network and harassing employees.
Huawei thinks the Wall Street Journal’s reporting about it can only be described as “disingenuous and irresponsible” and that it harmed its reputation. The company is also swinging the legal action stick as a sign that it’s ready to go to court to protect its image.
