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Quiet China giant embodies technology aspirations
Question of the Day
“You have Chinese people based in Sweden and Western people based in Shenzhen. It’s become a very globalized process,” said Richard Brennan, a Californian who has worked for Huawei since 2007 and is deputy director of industrial standards.
Other Chinese companies also are starting to make a name for themselves as technology creators.
Mindray Medical International Ltd., also based in Shenzhen, competes with General Electric Co. and Germany’s Siemens AG to sell X-ray machines and other medical devices in the United States and Europe.
ZTE Corp., a Huawei rival also based in Shenzhen, sells switching equipment, mobile phone base stations and handsets.
Shenzhen’s success as a center for technology and finance has propelled its growth from a fishing village of about 30,000 people in 1980 before it was declared China’s first “special economic zone” into a skyscraper-filled metropolis of more than 14 million.
Beijing urgently wants to nurture more such innovators to reduce reliance on foreign technology and create higher-paid jobs. It has promised grants, tax breaks and other support to promote “strategic industries” including clean energy, environmental and information technology, biotech and high-end manufacturing.
Some of its tactics have irritated its trading partners. The government is pressing global companies to hand over wind power, computer encryption and other technologies as the price of market access. Business groups complain Beijing’s efforts to nurture local suppliers by favoring them in government purchases of computers and other technology violates the spirit of its free-trade commitments.
Chinese officials respond to some of the criticism by pointing out that U.S., European and Japanese companies also receive tax breaks, export subsidies and other help from their governments.
Song, the Huawei vice president, rejected suggestions its success is based on government support. He said it comes instead from market-driven decisions and a corporate culture that motivates employees with stock and quick promotions.
Huawei’s February statement said some customers receive financing from China’s state-owned banks. But Song said that while it gets some government grants, Huawei pays for most of its research out of its own sales.
“In the 1980s, there were hundreds of state-owned companies in the telecoms industry with Huawei, but they did not survive,” he said. “If the state or military connection were the key to success, they should have developed very well, but they no longer exist.”
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