Last week the founder and CEO of the Chinese company Huawei is Ren Zhengfei in a very emotional speech, warned his employees that the company is “between life and death.” Sounds apocalyptic. However, you should understand that the Chinese language is full of double meanings, and Chinese philosophy and the mentality perceives the two concepts are not, as in the West. Life and death are two parts of one process. Or two States on the eternal path of rebirth. As the crisis in Chinese, is not the end of the world, and the starting point for further development, point of interchange and the new movement.
That is why this “last hour”, the head of Huawei encouraged the employees, especially nedozagruzheny not to despair but to enter the “group of special purpose” and focus on new projects, otherwise they face a reduction in salary or dismissal. “We need to reorganize in a harsh and difficult conditions, by creating an invincible army of iron, which will help us to win,” — said the head of Huawei. While Ren Zhengfei is convinced that his company would prosper, the US actions will not cause considerable damage, but rather strategically useful to Huawei. “Now we can focus more on the most competitive products,” said Zhengfei added that Huawei can succeed without relying on an American company.
We will remind, the attack on the Chinese tech giant began on December 1, 2018, when the airport in Vancouver, Canada at the request of the U.S., was detained Huawei CFO Meng Wanzhou, coinciding with the daughter of the head of the company. The reason for the detention was that Huawei disobeying the commandments of the “Washington regional Committee” dared to do business with Iran in violation of American sanctions. The Americans claim that man, as the CFO personally responsible for transactions in Iran by British and French banks. What is this, the reader will ask, it’s business as usual? But otherwise I think in the US.
It was already clear that the detention of the man — a pretext to declare war on the Chinese technology giant, naturally find themselves on the front lines of global war, USA vs China, which aims to stop the rapid economic and technological development of China. Competitor want to knock on takeoff.
In may 2019 Huawei and 70 subsidiaries included in the black list of the us Department of Commerce. On the termination of cooperation with the Chinese company announced a number of major us technology companies, including Intel and Google.
In late June, the leaders of the United States and China, Donald trump and XI Jinping at the G20 summit seems to be agreed on a truce, one of which was the removal of the ban on cooperation with Huawei for American companies. However, the Americans the next day broke the agreement. After it became known that US authorities have decided not to issue licenses to American companies to work with Chinese company.
In this context, the President of Huawei looks not like a cry of a drowning man, and sounds like response to the Declaration of war, the entry into which the Chinese company is strongly delayed. But now takes up the challenge.
Confirming this idea, and later the official representative of Huawei announced that the Chinese Telecom giant is ready to work in the conditions of sanctions pressure of the United States, and the impact of restrictive measures was less than expected in June. According to preliminary estimates, the company will lose from sanctions $ 10 billion. Deadly whether it is for business with annual revenues of 109 billion dollars? Of course not. Besides, oddly enough, sales of Huawei smartphones in the first half of 2019 rose by 24 percent to 118 million gadgets. Historical record.
Immediately after the Declaration by the Americans of the war of the Chinese company, revealed that Huawei to the battle prepared. In response to the excommunication from the American operating systems, Huawei presented its own development, in particular for smartphones — HarmonyOS. And not so long ago showed off a new processor Ascend 910, equipped with artificial intelligence technologies. When the Chinese behave very cautiously, stressing that it will rely on cooperation with the American companies that have been working for many years.
But there is no doubt: alternatives to American technology and components will appear like mushrooms after a summer rain, which became for the Chinese a cold shower, spilled from Washington. As follows from the statements of the representatives of Huawei, the development is in full swing, in all directions and only aktiviziruyutsya after the head of the company “about life and death.” Few people know that in the past year, Huawei has allocated for research and development (R & d) $ 35 billion. For comparison: Apple’s spending amounted to 14 billion dollars.
This is to some extent illustrates the charges in the theft of technologies that are constantly heard from Washington without concrete evidence and facts.
For this reason very accurately and succinctly put it the new Ambassador of China in Russia Zhang Hongwei: “Technologies that exist today in China, America simply does not have. How can we steal something that the US is not or what will have tomorrow?”. Indeed, Huawei is a recognized leader, for example, in the development and implementation of technologies of data transfer 5G.
It is clear that for Washington, who conceived the power to break Huawei and generally slow down the development of China, this is not an argument. But in response to the restrictive and protectionist actions of the United States, the Chinese giant works in the opposite direction. We can see this firsthand.
In 2018 Huawei has increased its revenue in Russia more than doubled, to 132.2 billion rubles (the Russian “daughter” of the Apple, the figure grew by 30% to 197,2 bln). In addition, in 2018, Huawei ranked second in sales of smartphones in Russia, displacing Apple in third position.
It is known that the Chinese giant is negotiating with Russian partners in order to expand the sale, to deepen technological cooperation. We are talking about joint development of operating systems and on the use of Russian apps. Latest news: Huawei sharply expanding its Russian representative office and looking for a second office in Moscow. Until 2024 the company intends to increase its staff in Russia 4 times and to hire about 1.5 thousand people. So this is our chance to win a little battle in this foreign war, at the same time supporting partner.
Meanwhile, the US President said: “Our country has lost over the years foolishly trillions of dollars from China. They steal our intellectual property worth hundreds of billions of dollars a year, and they intend to continue. I will not allow it! China does not need, and frankly, without it we would be much better… Our great American companies now have to start to look for alternatives to China, including manufacturing to return home and make their products in the United States.” These words immediately brought down the stock prices of the largest American companies, most of which are somehow earn in China.
Mr. trump, apparently, not very knowledgeable, for example, that almost all the Apple smartphones are made in China for American companies located in special zones with preferential taxation. These factories are Chinese people, receiving a moderate by American standards wages. In this part accessories for gadgets imported from the US, and then there comes true ready products to for some time free of duties and customs tariffs. That’s why “Apple products” so good I bought around the world. If you move all of this production in the United States, Apple will soon become a plaything for the elite with a corresponding reduction of the market. However, the market has narrowed after the call of the Chinese not to buy American. And if trump intends to isolate itself from world trade duties, he may be mistaken in their calculations. The U.S. market, including young children and very old men is at least 4 times less than China. Even if China similarly decided to respond with withdrawal, its potential for development is much higher than the us. But China is not going to do that, he is a principled opponent of protectionism and trade restrictions. How would the President of the United States shot itself in the foot, failing to own re-election.
About the author: Michael Morozov, the observer of “Work”.
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