Huawei’s ‘Dare to Die’ Business Model

The Huawei logo is seen during the Mobile World Congress in Barcelona, Spain on Feb. 26, 2018. Yves Herman/Reuters

In his analysis of Huawei’s business model, Chinese economist Wang Shuangyi came to the conclusion that the massive tech company serves as a “gan si dui,” or “dare to die” kamikaze unit in Beijing’s strategy to dominate markets around the world.

“The basic business model of Huawei can be summed up as a sweatshop [that works as] the Chinese Communist Party’s ‘dare to die unit’ [in a global] Ponzi scheme,” Wang wrote in the Dec. 20, 2018, article.

Wang used the term “dare to die” as a reference to the company’s extreme work environment, as well as its special role in the Chinese regime’s economic ambitions. Being, at least on paper, a privately owned business, Huawei can carry out certain activities that would be too risky or diplomatically inappropriate for a Chinese state firm.

“Under the banner of patriotism and localization, Huawei and [other Chinese companies] copied, plagiarized, and stole” technology from foreign entities, Wang said. They reverse-engineered foreign technology and “pushed the foreigner suppliers out of China.”

“Then, using their profits from the Chinese market and different types of subsidies from China, they exercise active domination in overseas markets,” Wang said. The key to this, he says, is that Huawei’s products come with backdoors that provide a channel for Chinese regime hackers.

Huawei is the Communist Party’s “spear,” Wang said. “It carries the responsibility for comprehensively purchasing and stealing [foreign] technology.”

Wang predicts that as the pernicious nature of the Huawei model becomes more apparent to foreign markets and governments, it will face increasing backlash for its actions. That’s been prominently reflected in the recent arrest of CFO Meng Wanzhou by Canadian authorities for her company’s alleged violation of U.S. sanctions against the Iranian regime.

The Chinese regime has reacted strongly to Meng’s arrest, detaining several Canadian citizens in China and staging high-profile diplomatic protests. It’s encouraged a boycott of the Canadian apparel company Canada Goose by the Chinese people. According to Wang, that shows how much the CCP regime values Huawei for its utility in gathering intelligence and expanding its global influence.

Phases of Expansion

Chen Lifang, a board member and senior vice president of Huawei, said in a speech to new Huawei hires last April that China still lags decades behind the United States in many technological fields.

“In precision and smart instruments, and test equipment, the gap is bigger … for all testing devices, we rely on imports,” Chen said. “As for equipment banned by The Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies, our comrades who work on the hidden front have to take the risk and smuggle them.”

According to Wang, Huawei has planned three phases to catch up with developed countries.

In the first phase, during the 2000s, Huawei copied the software of Cisco, an American multinational technology conglomerate, and sold its system for less than half the original price. Cisco sued Huawei, but strong CCP regime backing meant that the U.S. company could hardly succeed in court.

Meanwhile, Chinese propaganda promoted Huawei as a patriotic enterprise, and claimed that using Huawei’s products was patriotic.

The second phase saw Huawei expand its business overseas while disregarding international laws and regulations. Huawei’s main competitor in this stage was ZTE, a state-owned telecommunication company and second-biggest telecom equipment manufacturer in China.

“We struggle very hard to compete with Huawei in Africa,” Lu J., a ZTE senior project manager, told The Epoch Times. According to Lu—whose full name was withheld to protect his identity—both Huawei and ZTE use bribes in the global market, but Huawei is willing to give more. “They are very generous.”

Huawei and ZTE have another advantage not available to U.S. companies.

The CCP regime funds infrastructure projects in other countries. One of the conditions for taking part in this development is that the host country must install Chinese-built equipment. This has resulted in Huawei and ZTE grabbing a big market share in Africa, South America, and other developing regions.

The third phase involves the further development of the CCP’s plans, from forcing foreign companies in China to hand over their technology, to recruiting overseas experts and scientists to work for Chinese companies.

“As a private company, Huawei looks independent. By investing in the institutes in Europe and North America, and aiding the universities, it receives technology from them,” Wang wrote.

In addition to setting up cooperative programs with foreign universities and institutes, Huawei also creates research centers overseas that can benefit from cutting-edge technology that’s produced locally.

“Some CCP military experts can even pose as Huawei employees, and receive training at European and American universities,” Wang said. “Huawei’s equipment plays a key role in the Party’s cyber attacks.”

Human Costs

In recent years, there have been many reports about Huawei employees dying from suicide, overwork, or being fired because of age or illness.

“Huawei emphasizes a wolf culture,” Wang said. “It lays off employees over the age of 35 en masse.”

Xie Ting, a young widow, published a long post on Dec. 25, 2018, to mourn her husband Qi Zhiyong, a 36-year-old Huawei engineer in Kenya, who died of overwork.

Xie said Qi wasn’t allowed vacation for 22 months straight.

“One week before the death, he sent me a WeChat message and said might not finish the network cutover [upgrade]. Two days before he died, he worked day and night,” Xie said.

After Qi died, Huawei refused to compensate Xie and her two young children, both of whom are under the age of 10.

“The Huawei human-resource manager in Kenya, representative in Kenya, and human-resources director at Huawei headquarters told me that I’m welcome to file a lawsuit for compensation,” Xie wrote. “How can a single mom have the money, time, or energy to sue such a huge multinational conglomerate?”