Huawei Goes Global

Volume I: Made in China for the World

Wenxian Zhang, Ilan Alon, Christoph Lattemann, Wenxian Zhang, Ilan Alon, Christoph Lattemann

• Publisher: Palgrave Macmillan
• Year: 2020
• Print ISBN: 9783030475635
• eBook ISBN: 9783030475642
• Topic: Business
• Subtopic: Business General
• Index: Business

Huawei Goes Global provides a much-needed, comprehensive, and scholarly examination of the business environment and the striving global operations of China's technology giant. With theoretical research, case studies, data analysis, and empirical studies, this two-volume work tells a fascinating story of internationalization in an emerging economy. As one of the most powerful Chinese companies in the global economy, the largest global telecommunications-equipment producer and a leading consumer-electronics manufacturer, Huawei is a great example of the globalization of the Chinese enterprises in the twenty-first century.

In Volume I, scholars critically examine the rise of Huawei as a Chinese global enterprise from the political economy and public policy perspectives, as well as Huawei's development strategies, innovations, and talent management. In Volume II, multiple authors carefully study the growth of Huawei from regional and geopolitical perspectives, and its corporate communication and crisis management.  

Within the framework of the trade conflicts between China and the US, controversies over economic sanctions, intellectual property disputes, and espionage and cyber security concerns, this groundbreaking work makes an important contribution to both academic literature and the ongoing public discourse on Huawei.

Volume II is available here: https://www.palgrave.com/gp/book/9783030475789

© The Author(s) 2020

W. Zhang et al. (eds.)Huawei Goes GlobalPalgrave Studies of Internationalization in Emerging Marketshttps://doi.org/10.1007/978-3-030-47564-2_1

Begin Abstract

1. Introduction

Ilan Alon¹ , Wenxian Zhang² and Christoph Lattemann³

(1)

University of Agder, Kristiansand, Norway

(2)

Rollins College, Winter Park, FL, USA

(3)

Jacobs University, Bremen, Germany

Ilan Alon (Corresponding author)

Email: [email protected]

Wenxian Zhang

Email: [email protected]

Christoph Lattemann

Email: [email protected]

Keywords

HuaweiPolitical economyEmerging markets multinationalDragon MultinationalChina goes globalInnovationTalent managementInternational development

End Abstract

This book is Volume 1 of a two-volume book series on Huawei, one of the most enigmatic and talked about global firms. Huawei, a Chinese firm, is entangled with the US-China trade dispute, its own links to the Chinese government, and its role as a dominant global technology and telecommunications provider.

Huawei is a Chinese private information and communications technology (ICT) company; nevertheless, the founder’s military past and former work network along with the initial role as supplier to the military telecommunications have constantly risen doubts about the actual role of the Chinese in Huawei’s spectacular growth.

The first volume of our book is divided into three sections, consisting of 15 chapters, including this introduction and a conclusion chapter.

Part I. The Political Economy and the Public Policy Perspectives of Huawei’s Globalization.

Part II. The Rise of Huawei as a Chinese Global Enterprise.

Part III. Huawei’s Development Strategies, Innovations, and Talent Management.

1 Part I. The Political Economy and the Public Policy Perspectives of Huawei’s Globalization

The first four chapters in Part I of this book introduce Huawei, its growth and role in the global competitive environment of technology and telecommunications. The company has achieved prominence in a relatively short time, and a market share rivaling its major Western counterparts.

In the first chapter, to set the context, Prof. Thomas D. Lairson, of Rollins College (USA) describes the political economy context in which Huawei operates. The struggle of Huawei and China with the USA is greatly affected by the nature of the political economy of China’s domestic environment of state capitalism, by the deeply interdependent global system of political economy, and by the political economy of strategic interaction between China and the USA. His chapter examines each environment in terms of effects on Huawei and makes three arguments. First, Huawei succeeds due to the interaction of China’s system of state capitalism with the global system of deep interdependence. Second, the system of deep interdependence is threatened by, but also pushes back against, the US strategy of economic coercion of China. Third, the global environment of deep interdependence will likely cause the USA to fail to change the Chinese system of state capitalism, Huawei will survive and prosper, and the USA will not improve its competitiveness through a strategy of economic coercion of China. The chapter predicts a bleak outcome for the USA trade war on Huawei.

Dovetailing with Prof. Lairson’s Chap. 2, Francis Schortgen, University of Mount Union (USA), focuses on how the USA has weaponized the tools of economic globalization for geopolitical purposes. His chapter aims to put the challenges facing Chinese technology companies as they aim for autonomy and supremacy in the area of emerging and competitiveness-influencing technologies in the broader context of US-China structural rivalry. Against the backdrop of the “Made in China 2025” blueprint as well as Beijing’s “Next Generation Artificial Intelligence Development Plan,” which aims to transform China into a global leader in artificial intelligence (AI) by 2030, the chapter begins by tracing Huawei’s global ascent in the context of globalization, global competition, and national innovation policy. Next, it elucidates why, how, and to what extent geopolitical and geostrategic consideration have come to influence US reactions to the global ambitions of Chinese technology companies. As the intersection of geopolitics and quest technology leadership has brought the USA and China perilously close to the brink of a Technology Cold War that would have far-reaching implications for global technology development going forward, the chapter concludes that, unless and until the USA and China can find common ground through constructive cooperation in the realm of emerging technologies, Huawei and other Chinese tech companies are bound to squarely remain in the crosshairs of geopolitics.

Staying with political and policy implications, Jean-Marc F. Blanchard, Executive Director Mr. & Mrs. S.H. Wong Center for the Study of Multinational Corporations (USA), suggested that China has aided Huawei for many years, most visibly through multi-billion-dollar loans to support overseas investment, contracting, and sales activities. Recently, the government level of support has reached new heights as evidenced by the harsh tone of official Chinese media coverage of those that malign Huawei, the government’s vigorous public defense of Huawei, and its threats and sanctions against countries and companies that make anti-Huawei moves. Chapter 4 shows that China’s helping hand for Huawei has roots in its technology policy generally and telecommunications policy specifically, both of which are driven by powerful international and domestic security, political, economic rationales that are long-standing, albeit fluctuating in importance. Given this, foreign governments and businesses should not expect China to hang up on Huawei absent compelling countervailing forces.

In Chap. 5, Shirley Ze Yu, Ash Center Fellow, the Harvard Kennedy School (USA) and Senior Visiting Fellow, the London School of Economics (UK), also agrees that Huawei’s rise is part of a greater initiative of the government to build technological capabilities, linked to other global initiatives, such as the Belt and Road Initiative (BRI), which aims at building infrastructure connectivity through continental Eurasia and maritime Asia, the Middle East, and Africa. Physical infrastructure, such as rails and ports, represents the economic precipitators of the twentieth century. Digital infrastructure, primarily gauged by use of broadband and 5G networks, are symbols of economic impetus of the twenty-first century. Digital infrastructure building is a quintessential part of China’s Belt and Road Initiative. Huawei is at the core and a prominent beneficiary of China’s global geostrategic reordering through its Belt and Road Initiative.

The premise of Chap. 5 is that Huawei’s global leadership in 5G infrastructure and China’s ambition to lead a global cutting-edge technological standard for the first time in post-industrial world history are interwoven and one. Huawei is capable of covering the world with digital infrastructure powered by China, and as a result, amass data globally. Further, the leadership in 5G infrastructure provided by Huawei can empower the speed and amount of data collection. Therefore, it can fuel China’s AI development to outcompete in the technological supremacy war with the USA, as China anticipates by 2030. Future global technology is led by AI technology, and AI development is conditioned upon 5G infrastructure. Lastly, as witnessed today, Huawei’s 5G technology is fast expanding and is warmly accepted across a large part of the developing world. Most of these countries are run by non-full liberal regimes. Governments cite Huawei’s censorship capability as a major attribute to contracting Huawei’s 5G service. Therefore, Huawei’s global expansion will spread China’s philosophy of technology, an intrinsic part of China’s modern political economic discourse under state capitalism, to all countries under Huawei’s coverage. Adopting Huawei’s 5G network is to consent to China’s technological philosophy.

What the first four chapters in Part I show is that understanding the rise of Huawei is partly understanding the rise of the Chinese economic and political model. Huawei global success and China’s ascendancy in technological capabilities are, in fact, highly linked.

2 Part II. The Rise of Huawei as a Chinese Enterprise

Part II consists of four chapters with a more micro and meso view of Huawei and its analysis. Most of the chapters link the firm-specific capabilities to the state and its policies.

Chapter 6, by Denise Tsang, Henley Business School (UK), and David Fuschi, Kalinga Institute of Industrial Technology (India), assesses Huawei’s strategy. The chapter explores the impact of the Trump administration’s recent sanction on Huawei, introduces existing literature concerning the liability of foreignness and firm-specific advantages in relation to Huawei’s circumstances, discusses the current company crisis within global geopolitical cross-currents, and evaluates the path Huawei can pursue to reconfigure its business model. Huawei has successfully globalized its operation over the decades and has moved from launching products and services that meet the needs of customers initially in emerging economies to successfully utilizing its experience and serving customers in advanced economies. Huawei has been forced to stand to fight for its survival for the first time in its corporate history; it will have to try its best, with little room for maneuver or error. What is known for sure is that Huawei has actively planned for crisis management, which is a characteristic of Chinese management, and it is clear that Huawei’s Plan B has enabled it to prepare for the worst-case scenario.

Yun Wen, Senior Economist, Simon Fraser University (Canada) wrote Chap. 7 about Huawei’s expansion to the developing world. This chapter combines the political economic approach and industrial studies of global information and communication technology (ICT) to examine the motive, pattern, and implications of Huawei’s expansion in the global South. Moving beyond the firm-specific perspective, this chapter draws particular attention to the state-firm relationship, as well as the geopolitical-economic tensions that underlie Huawei’s internationalization. Amid the growing geo-technological rivalry between the USA and China, Huawei’s increasing presence as a new source of investment and technological support in the global South exemplifies China’s effort to extend the country’s control over transnational network infrastructures and to reconstruct an alternative model of globalization toward a multipolar political economic order in the digital economic era.

Chapter 8, written by Duane Windsor, Rice University (USA), analyzes the tripod effects of Huawei on domestic policy, global agency, and foreign policy. Windsor offers a three-world framework within which to evaluate Huawei Technologies Company as a Chinese multinational. In one world, Huawei is arguably a domestic policy instrument for the Chinese communist regime. In another world, Huawei is an independent global economic agent. In a third world, Huawei is a target of US foreign policy in the context of a trade war, technological competition, and geopolitical competition between the USA and China. Windsor’s purpose is to explore how to interpret potentially conflicting information about Huawei and its founder and chief executive officer Ren Zhengfei. The three-world procedure helps to maintain a critical and balanced appraisal of this information. One possible interpretation is that Zhengfei and Huawei attempt to balance Chinese and US pressures in order to maintain autonomy.

In the final chapter of Part II, Chap. 9, Anders Kjellman, CEO of AKC Ltd. and Novia University of Applied Sciences (Finland), Xiaohua Yang, University of San Francisco (USA), Xiaobo Wu, Zhejiang University (China), and Sun-Young Park, University of San Francisco (USA), analyze Huawei in relation to one of its competitors, Nokia. The aim of their study is to compare the globalization strategy of current and former world giants in mobile phones and networks: Huawei and Nokia. To do that, a Six-M model is developed, which provides insights into classic strategic management questions: what makes a company successful and what makes a corporation fail? Disruptive innovation management of an emerging economy multinational (EMNE), Huawei is contrasted with the retreat of Nokia. One lesson to be learned by managers is that customer focus, meaning, and value management are important factors behind success.

3 Part III. Huawei’s Development Strategies, Innovations, and Talent Management

Part III, Chaps. 10 to 14, att...

Table of contents

• Cover
• Front Matter
• 1. Introduction
• Part I. The Political Economy and the Public Policy Perspectives of Huawei’s Globalization
• Part II. The Rise of Huawei as a Chinese Global Enterprise
• Part III. Huawei’s Development Strategies, Innovations, and Talent Management
• Back Matter