1 00:00:04,240 --> 00:00:07,240 Speaker 1: Welcome to Tech Stuff, a production of I Heart Radios 2 00:00:07,320 --> 00:00:13,920 Speaker 1: How Stuff Works. Hey there, and welcome to tech Stuff. 3 00:00:13,960 --> 00:00:16,959 Speaker 1: I'm your host, Jonathan Strickland. I'm an executive producer with 4 00:00:17,040 --> 00:00:19,239 Speaker 1: I Heart Radio and How Stuff Works, and I love 5 00:00:19,320 --> 00:00:24,639 Speaker 1: all things tech. Kind of man, I may need to 6 00:00:24,680 --> 00:00:28,760 Speaker 1: rethink that intro. So one of the ongoing stories in 7 00:00:28,800 --> 00:00:32,200 Speaker 1: twenty nineteen has been about how various governments around the world, 8 00:00:32,440 --> 00:00:36,640 Speaker 1: particularly the United States government, have been mounting in opposition 9 00:00:36,720 --> 00:00:41,560 Speaker 1: to the Chinese telecom company Huawei. That company has only 10 00:00:41,600 --> 00:00:46,200 Speaker 1: been around since nineteen eight seven slash so a little 11 00:00:46,240 --> 00:00:49,480 Speaker 1: more than thirty years, and yet it's now a dominant 12 00:00:49,520 --> 00:00:52,879 Speaker 1: company in the telecom industry that brings in more than 13 00:00:53,040 --> 00:00:57,560 Speaker 1: ninety billion dollars in revenue. In today's episode, I want 14 00:00:57,600 --> 00:01:01,640 Speaker 1: to explore the history of Huawei ties to the Chinese government, 15 00:01:01,920 --> 00:01:05,640 Speaker 1: the incredible rise to prominence on the world stage, and 16 00:01:05,680 --> 00:01:09,479 Speaker 1: the reasons why the company is encountering resistance today. Now, 17 00:01:09,880 --> 00:01:12,959 Speaker 1: before I jump into the whole backstory, I want to 18 00:01:13,000 --> 00:01:16,839 Speaker 1: address a real issue about covering these types of topics. 19 00:01:17,319 --> 00:01:20,480 Speaker 1: Researching topics is always a challenge because you have to 20 00:01:20,520 --> 00:01:25,560 Speaker 1: take into consideration your sources. Some sources may be unreliable, 21 00:01:25,800 --> 00:01:29,319 Speaker 1: either because they are poorly constructed, or they may be 22 00:01:29,560 --> 00:01:33,760 Speaker 1: part of a propaganda or a misinformation campaign specifically designed 23 00:01:33,760 --> 00:01:36,440 Speaker 1: to project a particular story. You can think of it 24 00:01:36,520 --> 00:01:40,080 Speaker 1: as a quote unquote version of the truth, and truth 25 00:01:40,120 --> 00:01:43,560 Speaker 1: would be an extra quotation marks. In this episode, I 26 00:01:43,600 --> 00:01:46,640 Speaker 1: attempted to corroborate as much information as I could with 27 00:01:46,760 --> 00:01:50,000 Speaker 1: several sources, but much of the information coming out of 28 00:01:50,080 --> 00:01:55,800 Speaker 1: China has been let's say, vetted heavily, and so getting 29 00:01:55,840 --> 00:01:59,280 Speaker 1: to what is really going on remains a challenge. It's 30 00:01:59,320 --> 00:02:02,640 Speaker 1: possible that the story that's being presented is in fact 31 00:02:02,720 --> 00:02:06,840 Speaker 1: a reflection of what is really happening, but it's also 32 00:02:06,960 --> 00:02:11,160 Speaker 1: possible that it's not. Also, I'll be talking a lot 33 00:02:11,240 --> 00:02:15,320 Speaker 1: about the Communist Party of China in this episode, and 34 00:02:15,360 --> 00:02:18,239 Speaker 1: I want to make it clear that the Communist Party 35 00:02:18,560 --> 00:02:23,400 Speaker 1: is essentially synonymous with the Chinese government, and it's communist 36 00:02:23,440 --> 00:02:26,600 Speaker 1: with a capital C, as opposed to someone who believes 37 00:02:26,639 --> 00:02:29,919 Speaker 1: in the philosophy of communism, which would be a lower 38 00:02:29,919 --> 00:02:33,880 Speaker 1: case see communist. When I say communist in this episode, 39 00:02:34,080 --> 00:02:37,320 Speaker 1: I'm talking about the political power in China, not the 40 00:02:37,320 --> 00:02:41,520 Speaker 1: philosophy that the political party takes its name from the 41 00:02:41,600 --> 00:02:46,000 Speaker 1: two are different, largely different in fact. Okay, now let's 42 00:02:46,000 --> 00:02:49,360 Speaker 1: get on with the show. A lot of Huawei's history 43 00:02:49,480 --> 00:02:53,120 Speaker 1: hinges on the massive changes in China that began in 44 00:02:53,160 --> 00:02:56,960 Speaker 1: earnest in. If you want to learn more about China's 45 00:02:56,960 --> 00:03:00,000 Speaker 1: path to entering the modern age, listen to the episode 46 00:03:00,440 --> 00:03:04,400 Speaker 1: that came out just before this episode, because those changes 47 00:03:04,400 --> 00:03:06,960 Speaker 1: are what made it possible for a company like Huawei 48 00:03:07,000 --> 00:03:10,440 Speaker 1: to exist in the first place. The story of Huawei 49 00:03:10,480 --> 00:03:13,960 Speaker 1: begins with the story of its founder, Ren Shan Fai. 50 00:03:14,360 --> 00:03:17,920 Speaker 1: Wren was born in nineteen forty four in Unshun, a 51 00:03:18,080 --> 00:03:22,400 Speaker 1: city in the province of Gishao, China. I apologized, by 52 00:03:22,400 --> 00:03:25,760 Speaker 1: the way for butchering the pronunciation of all these names, 53 00:03:25,880 --> 00:03:29,480 Speaker 1: And I have to admit, I really am quite ignorant 54 00:03:29,480 --> 00:03:32,400 Speaker 1: about much of China, So all of what I'm about 55 00:03:32,440 --> 00:03:35,200 Speaker 1: to relay to you was brand new to me when 56 00:03:35,200 --> 00:03:38,960 Speaker 1: I started researching this episode. I don't want to even 57 00:03:39,000 --> 00:03:42,440 Speaker 1: remotely make it seem like I feel I'm an expert 58 00:03:42,480 --> 00:03:46,760 Speaker 1: on this subject matter. So Gishao is an interior province 59 00:03:46,920 --> 00:03:50,200 Speaker 1: of China. It's far from the coastal cities that marked 60 00:03:50,320 --> 00:03:54,320 Speaker 1: China's centers of trade, and it's a more rural province 61 00:03:54,520 --> 00:03:57,320 Speaker 1: in China, though that has been changing over the past 62 00:03:57,440 --> 00:04:01,080 Speaker 1: several years. When the economic reform arms of nineteen seventy 63 00:04:01,160 --> 00:04:04,960 Speaker 1: eight began to take effect in China, Gao would largely 64 00:04:05,000 --> 00:04:09,440 Speaker 1: be left behind, becoming the poorest province for nearly two 65 00:04:09,480 --> 00:04:13,840 Speaker 1: decades now. Wren's parents worked at a school in ann 66 00:04:14,320 --> 00:04:18,840 Speaker 1: His father also had worked for a weapons factory as 67 00:04:18,839 --> 00:04:22,480 Speaker 1: sort of a clerk. The order in which that actually 68 00:04:22,480 --> 00:04:25,640 Speaker 1: happened is one I'm not entirely sure about, because there's 69 00:04:25,640 --> 00:04:30,920 Speaker 1: some conflicting information, conflicting stories in various sources. There's even 70 00:04:30,960 --> 00:04:34,880 Speaker 1: one version of this story I've seen that said definitively 71 00:04:35,279 --> 00:04:38,920 Speaker 1: that Wren was born in October nineteen forty four and 72 00:04:38,960 --> 00:04:43,320 Speaker 1: that his parents first met in nineteen forty nine, which 73 00:04:43,320 --> 00:04:45,960 Speaker 1: I considered to be something of a puzzler. Now this 74 00:04:46,040 --> 00:04:49,400 Speaker 1: comes as a little surprise to me, because I mean, 75 00:04:49,440 --> 00:04:52,120 Speaker 1: after all, getting information out of China is a is 76 00:04:52,160 --> 00:04:54,080 Speaker 1: a bit of a crap shoot on the best of days, 77 00:04:54,120 --> 00:04:58,719 Speaker 1: So really, I guess you should expect it. One thing 78 00:04:58,839 --> 00:05:01,960 Speaker 1: that definitively but in nineteen forty nine is that was 79 00:05:02,000 --> 00:05:05,840 Speaker 1: the year the Communist Party gained control of China, and 80 00:05:05,880 --> 00:05:10,400 Speaker 1: it has held onto China's government ever since. I mean 81 00:05:10,400 --> 00:05:16,159 Speaker 1: the two are essentially synonymous. Bren attended school, enrolling in 82 00:05:16,240 --> 00:05:19,320 Speaker 1: university in nineteen sixty. After he left school, at least 83 00:05:19,320 --> 00:05:22,640 Speaker 1: according to some sources, he worked in civil engineering for 84 00:05:22,680 --> 00:05:26,839 Speaker 1: a while, but in the nineteen seventies. Frequently it's cited 85 00:05:26,880 --> 00:05:31,279 Speaker 1: as nineteen seventy four he joined the People's Liberation Army 86 00:05:31,520 --> 00:05:36,080 Speaker 1: or p l A. That's China's official armed forces, and 87 00:05:36,120 --> 00:05:39,920 Speaker 1: it's overseen by the Communist Party of China. This is 88 00:05:40,000 --> 00:05:43,440 Speaker 1: an important part of our story, not just because it's 89 00:05:43,440 --> 00:05:46,520 Speaker 1: certainly had an impact on the life of the founder 90 00:05:46,560 --> 00:05:50,000 Speaker 1: of Huawei, but also because the p l A effectively 91 00:05:50,520 --> 00:05:53,480 Speaker 1: belongs to the Communist Party as much as it does 92 00:05:53,560 --> 00:05:55,640 Speaker 1: to China. In fact, you could argue that the p 93 00:05:55,839 --> 00:05:59,600 Speaker 1: l A is really the Communist Party's military, as one 94 00:05:59,640 --> 00:06:03,320 Speaker 1: of its founding principles is to ensure the Communist Party 95 00:06:03,320 --> 00:06:08,760 Speaker 1: of China maintains its power in government. Rents specifically worked 96 00:06:09,000 --> 00:06:11,600 Speaker 1: within the p l A at a research institute as 97 00:06:11,640 --> 00:06:15,000 Speaker 1: a technologist. When he joined, China was going through Mount 98 00:06:15,120 --> 00:06:18,680 Speaker 1: z Thong's Cultural Revolution, and if you listen to the 99 00:06:19,000 --> 00:06:22,920 Speaker 1: episode before this one, you'll learn more about the Cultural Revolution. 100 00:06:23,279 --> 00:06:27,159 Speaker 1: Much of China was tumultuous and chaotic during those years. 101 00:06:27,480 --> 00:06:31,680 Speaker 1: Large areas of China faced enormous challenges, with people struggling 102 00:06:31,720 --> 00:06:36,680 Speaker 1: to make their basic needs met just to survive. So 103 00:06:36,800 --> 00:06:41,160 Speaker 1: Ren's department his his unit was sent to the northeast 104 00:06:41,240 --> 00:06:44,200 Speaker 1: region of China, in an area that was quite different 105 00:06:44,240 --> 00:06:49,000 Speaker 1: from Ren's home province, and conditions there were frigid and 106 00:06:49,040 --> 00:06:52,520 Speaker 1: they were harsh. And Rin's department was tasked with building 107 00:06:52,560 --> 00:06:56,320 Speaker 1: a factory that would produce synthetic fibers, which would then 108 00:06:56,360 --> 00:06:59,720 Speaker 1: be woven together to create new clothing for Chinese citizens. 109 00:07:00,080 --> 00:07:02,760 Speaker 1: According to Wren, he talked about this period of his 110 00:07:02,839 --> 00:07:06,320 Speaker 1: life in a press conference in early twenty nineteen. During 111 00:07:06,360 --> 00:07:12,360 Speaker 1: this time, each Chinese citizen had a government mandated allotment 112 00:07:12,640 --> 00:07:15,840 Speaker 1: of one third of a meter of cloth, and Wren 113 00:07:15,840 --> 00:07:19,000 Speaker 1: said in that interview that this small amount of cloth 114 00:07:19,080 --> 00:07:22,320 Speaker 1: meant you really only had enough material to patch holes 115 00:07:22,360 --> 00:07:25,840 Speaker 1: in older clothing. So this factory that he was working 116 00:07:25,880 --> 00:07:28,400 Speaker 1: on was part of an effort to counteract the scarcity 117 00:07:28,400 --> 00:07:32,120 Speaker 1: of cloth made from natural fibers by augmenting it with 118 00:07:32,240 --> 00:07:36,120 Speaker 1: synthetic fiber. Clothing now the factory would not be dependent 119 00:07:36,280 --> 00:07:41,680 Speaker 1: upon Chinese technology. Frankly, Chinese technology wasn't up to the task, 120 00:07:42,160 --> 00:07:46,800 Speaker 1: so China imported equipment from France, which supplied a system 121 00:07:46,840 --> 00:07:51,640 Speaker 1: that relied heavily on automated controls. The Chinese team learned 122 00:07:51,800 --> 00:07:55,320 Speaker 1: how these components worked, how to maintain them, and then 123 00:07:55,400 --> 00:07:59,000 Speaker 1: even how to reverse engineer them to an extent, so 124 00:07:59,040 --> 00:08:01,880 Speaker 1: you could take this base strategy and apply it across 125 00:08:02,040 --> 00:08:06,360 Speaker 1: China across all industries. That's essentially how China was able 126 00:08:06,400 --> 00:08:08,080 Speaker 1: to start to catch up to the rest of the world, 127 00:08:08,480 --> 00:08:13,760 Speaker 1: importing technology and then reverse engineering it. So that was 128 00:08:13,880 --> 00:08:17,600 Speaker 1: pretty much part and parcel the way China got caught 129 00:08:17,680 --> 00:08:22,280 Speaker 1: up on lots of technologies throughout the seventies, eighties, and nineties, 130 00:08:22,840 --> 00:08:25,400 Speaker 1: and then after that they could start designing their own 131 00:08:25,400 --> 00:08:28,920 Speaker 1: technology and innovating upon it. Now, Wren would go on 132 00:08:28,960 --> 00:08:32,120 Speaker 1: to become part of the p l a's Engineering Corps 133 00:08:32,200 --> 00:08:34,760 Speaker 1: and later still as a member of the Communist Party, 134 00:08:34,800 --> 00:08:38,320 Speaker 1: but this was not a smooth path for him. His 135 00:08:38,400 --> 00:08:42,840 Speaker 1: father had been labeled a capitalist during the Cultural Revolution, 136 00:08:43,200 --> 00:08:46,160 Speaker 1: and that accusation meant that Wren's family would all be 137 00:08:46,280 --> 00:08:50,040 Speaker 1: disqualified entry into the Communist Party, and that would end 138 00:08:50,120 --> 00:08:53,280 Speaker 1: up being a big hurdle because at the time, being 139 00:08:53,320 --> 00:08:55,640 Speaker 1: a member of the Communist Party was pretty much a 140 00:08:55,679 --> 00:08:59,359 Speaker 1: prerequisite if you wanted to reach any sort of status 141 00:08:59,440 --> 00:09:03,360 Speaker 1: within your career. You couldn't advance in your position if 142 00:09:03,400 --> 00:09:06,040 Speaker 1: you weren't a member of the Communist Party, even if 143 00:09:06,040 --> 00:09:08,719 Speaker 1: you were clearly talented and had a lot of aptitude. 144 00:09:09,320 --> 00:09:12,559 Speaker 1: Bren would work in the Engineering Corps, eventually inventing a 145 00:09:12,600 --> 00:09:15,920 Speaker 1: tool that could be used to help test factory equipment 146 00:09:16,160 --> 00:09:19,440 Speaker 1: at that synthetic fiber factory. That achievement earned him the 147 00:09:19,480 --> 00:09:23,680 Speaker 1: honor of being able to attend China's National Science Conference, 148 00:09:24,040 --> 00:09:27,480 Speaker 1: which was held by the Communist Party of China. His 149 00:09:27,559 --> 00:09:31,199 Speaker 1: work gained him support of party members and his Engineering 150 00:09:31,200 --> 00:09:34,800 Speaker 1: Corps supervisor, and they essentially sponsored him and helped him 151 00:09:34,840 --> 00:09:38,920 Speaker 1: secure membership within the Communist Party in ninety eight, just 152 00:09:39,120 --> 00:09:42,640 Speaker 1: as those economic reforms were starting to take place. Now, 153 00:09:43,200 --> 00:09:47,160 Speaker 1: this was two years after the death of Chairman Mao, 154 00:09:47,280 --> 00:09:50,640 Speaker 1: and it was when China was just beginning to reverse 155 00:09:50,880 --> 00:09:54,679 Speaker 1: decades of practices that had in many ways held back 156 00:09:54,800 --> 00:09:57,719 Speaker 1: the country. One of the big ones was an attitude 157 00:09:57,760 --> 00:10:02,640 Speaker 1: of suspicion towards intellectualism and education during the Cultural Revolution, 158 00:10:02,920 --> 00:10:05,680 Speaker 1: Mao saw to it the intellectuals and students whom he 159 00:10:05,760 --> 00:10:09,160 Speaker 1: viewed as potential threats to his position were sent off 160 00:10:09,240 --> 00:10:12,800 Speaker 1: to do manual labor in many of the interior sections 161 00:10:12,880 --> 00:10:16,800 Speaker 1: of the nation by night. The Chinese authorities decided that 162 00:10:16,840 --> 00:10:20,160 Speaker 1: this had done an incredible disservice to the country, and 163 00:10:20,200 --> 00:10:22,640 Speaker 1: so now people like Wren were being looked at as 164 00:10:22,720 --> 00:10:26,560 Speaker 1: potential leaders to bring China up to speed with developed nations. 165 00:10:27,080 --> 00:10:29,760 Speaker 1: Bren would rise to the rank of deputy director of 166 00:10:29,760 --> 00:10:32,840 Speaker 1: a research institute within the p l A. He oversaw 167 00:10:32,920 --> 00:10:36,960 Speaker 1: work that mainly focused on construction, which makes sense after 168 00:10:37,040 --> 00:10:41,840 Speaker 1: his experiences in helping establish that synthetic fiber factory. But 169 00:10:41,920 --> 00:10:45,360 Speaker 1: in nineteen eighty three, the Chinese government disbanded the engineering 170 00:10:45,400 --> 00:10:47,880 Speaker 1: core of the p l A and Wren was left 171 00:10:47,880 --> 00:10:51,720 Speaker 1: without a position, so he retired from the army, and 172 00:10:51,720 --> 00:10:54,280 Speaker 1: then he went on to work at the Shenjin South 173 00:10:54,440 --> 00:10:59,440 Speaker 1: Sea Oil Corporation. Shenjin is in southeast China Hong Kong, 174 00:10:59,480 --> 00:11:01,280 Speaker 1: which at the time was under the control of the 175 00:11:01,360 --> 00:11:06,839 Speaker 1: United Kingdom borders Snjin. The Shenjen South Sea Oil Corporation 176 00:11:07,000 --> 00:11:10,680 Speaker 1: is a state owned entity, meaning the oil boat company 177 00:11:10,720 --> 00:11:14,360 Speaker 1: belongs to the government of China that therefore the Communist 178 00:11:14,400 --> 00:11:17,160 Speaker 1: Party of China. Ren worked there for a few years, 179 00:11:17,160 --> 00:11:20,160 Speaker 1: but reportedly found the job unsatisfying, and he left in 180 00:11:20,240 --> 00:11:23,199 Speaker 1: nineteen seven with a new goal to create a company 181 00:11:23,240 --> 00:11:25,320 Speaker 1: of his own. And there are a lot of different 182 00:11:25,320 --> 00:11:30,559 Speaker 1: reports about Ren founding Huawei along with maybe four partners, 183 00:11:30,679 --> 00:11:33,560 Speaker 1: with the equivalent of somewhere between three thousand dollars and 184 00:11:33,600 --> 00:11:37,280 Speaker 1: five thousand dollars American. That's a pretty amazing story, considering 185 00:11:37,320 --> 00:11:41,199 Speaker 1: that today it's number nineties seven on Forbes's Most Valuable 186 00:11:41,240 --> 00:11:45,320 Speaker 1: Companies list and an estimated brand value of eight billion dollars. 187 00:11:46,160 --> 00:11:48,959 Speaker 1: Getting a handle in the company's value is actually really hard, 188 00:11:49,000 --> 00:11:53,240 Speaker 1: because well, to call its financial reporting opaque is going 189 00:11:53,720 --> 00:11:58,920 Speaker 1: beyond being generous. However, a piece in the Far Eastern 190 00:11:59,000 --> 00:12:02,880 Speaker 1: Economic Review, which took a detailed look at Huawei's financial 191 00:12:02,920 --> 00:12:07,720 Speaker 1: operations and complicated ownership status, tells a very different story. 192 00:12:07,760 --> 00:12:10,840 Speaker 1: In that version, Wren and fourteen colleagues took out a 193 00:12:10,880 --> 00:12:14,680 Speaker 1: loan from a state operated bank for the princely sum 194 00:12:14,880 --> 00:12:18,480 Speaker 1: of eight and a half million US dollars the equivalent 195 00:12:18,520 --> 00:12:22,480 Speaker 1: of that anyway, it was with this slightly less modest 196 00:12:22,720 --> 00:12:26,280 Speaker 1: nest egg that he founded the company Huawei. Now I 197 00:12:26,320 --> 00:12:29,880 Speaker 1: have no clue which version of this story is closest 198 00:12:30,000 --> 00:12:32,800 Speaker 1: to the truth. It may be that both are true, 199 00:12:32,920 --> 00:12:35,240 Speaker 1: and that the initial founding of the company was for 200 00:12:35,840 --> 00:12:39,400 Speaker 1: three to five thousand dollars and then startup costs were 201 00:12:39,440 --> 00:12:43,600 Speaker 1: covered by a substantial loan. I don't know, but there 202 00:12:43,600 --> 00:12:47,440 Speaker 1: are conflicts. Now, the original business of Huawei wasn't in 203 00:12:47,520 --> 00:12:51,760 Speaker 1: manufacturing or design. The company started off as a reseller. 204 00:12:52,240 --> 00:12:56,199 Speaker 1: It would import telecom equipment from other countries and also 205 00:12:56,280 --> 00:13:00,480 Speaker 1: from Hong Kong, stuff like telephone network switches, so the 206 00:13:00,520 --> 00:13:03,959 Speaker 1: basic components you would use to build out a telecommunications 207 00:13:04,000 --> 00:13:08,079 Speaker 1: network infrastructure. Then it would sell that equipment to clients 208 00:13:08,120 --> 00:13:12,360 Speaker 1: within China. So obviously this wasn't like average people in China. 209 00:13:12,440 --> 00:13:16,240 Speaker 1: This was for organizations, companies, the government. So one of 210 00:13:16,280 --> 00:13:20,160 Speaker 1: its earliest and largest clients was Ren's old employer, the 211 00:13:20,200 --> 00:13:25,040 Speaker 1: People's Liberation Army. Now, while reselling imported equipment was the 212 00:13:25,080 --> 00:13:28,160 Speaker 1: source of revenue, Huawei also would create a team of 213 00:13:28,200 --> 00:13:30,760 Speaker 1: engineers whose job it was to learn everything about the 214 00:13:30,760 --> 00:13:34,000 Speaker 1: equipment they were bringing in and then to reverse engineer 215 00:13:34,040 --> 00:13:39,120 Speaker 1: it with the ultimate goal being to produce similar tech independently. 216 00:13:39,559 --> 00:13:44,200 Speaker 1: In fact, Huawei had an imbalance between researchers and production. 217 00:13:44,360 --> 00:13:48,400 Speaker 1: Typically you would have way more people in production and 218 00:13:48,440 --> 00:13:52,400 Speaker 1: then a smaller number as engineers who are working in 219 00:13:52,600 --> 00:13:55,959 Speaker 1: R and D. Huawei through that on its side, where 220 00:13:56,400 --> 00:13:59,559 Speaker 1: you had about twice as many people who are working 221 00:13:59,600 --> 00:14:02,640 Speaker 1: in R and D essentially trying to reverse engineer this technology. 222 00:14:03,080 --> 00:14:06,160 Speaker 1: Then you have people actually producing the stuff, and thus 223 00:14:06,160 --> 00:14:10,559 Speaker 1: began Huawei's journey towards becoming a major telecommunications company. Now, 224 00:14:10,559 --> 00:14:13,000 Speaker 1: when we come back, I'll go into a bit more 225 00:14:13,280 --> 00:14:16,240 Speaker 1: detail about what we know or think we know of 226 00:14:16,280 --> 00:14:19,240 Speaker 1: the way the company operates. But first let's take a 227 00:14:19,360 --> 00:14:30,000 Speaker 1: quick break. The fact that v p l A partnered 228 00:14:30,080 --> 00:14:33,960 Speaker 1: with Huawei to build out a telecommunications infrastructure for the 229 00:14:34,000 --> 00:14:38,040 Speaker 1: military is a big reason for the success of the company. 230 00:14:38,360 --> 00:14:43,320 Speaker 1: In nine six, Huawei's reputation set it up for enormous 231 00:14:43,360 --> 00:14:47,120 Speaker 1: success as the Chinese government decreed that it would support 232 00:14:47,160 --> 00:14:51,800 Speaker 1: domestic telecommunications companies and prevent foreign companies from coming into 233 00:14:51,880 --> 00:14:56,360 Speaker 1: China to build out communications and internet infrastructure. So, whether 234 00:14:56,400 --> 00:15:00,240 Speaker 1: you view Huawei as truly independent or not, an in 235 00:15:00,280 --> 00:15:03,800 Speaker 1: case you're curious. I think any company in China is 236 00:15:03,840 --> 00:15:06,920 Speaker 1: at least partly subject to the whims of the Chinese government, 237 00:15:06,960 --> 00:15:11,120 Speaker 1: if not under the direct control of the Chinese government. Anyway, 238 00:15:11,120 --> 00:15:14,960 Speaker 1: the company owes much of its success to state backed support. 239 00:15:15,440 --> 00:15:20,000 Speaker 1: The Chinese government suppressed competition from foreign companies, and Huawei 240 00:15:20,080 --> 00:15:22,840 Speaker 1: got a nice, big boost both from the government and 241 00:15:22,920 --> 00:15:26,840 Speaker 1: the p l A. Now, why Huawei got such preferential 242 00:15:26,880 --> 00:15:31,000 Speaker 1: treatment is one of many unanswered questions about the company, 243 00:15:31,080 --> 00:15:35,240 Speaker 1: because it's not the only telecommunications company in China. There 244 00:15:35,240 --> 00:15:37,520 Speaker 1: are others as well. So why did Huawei get a 245 00:15:37,520 --> 00:15:41,440 Speaker 1: bigger boost than some of its fellow domestic telecom companies. 246 00:15:41,880 --> 00:15:46,520 Speaker 1: It's possible that the military and Communist party connections were 247 00:15:46,640 --> 00:15:51,320 Speaker 1: largely responsible for that. Huawei often ended up being the 248 00:15:51,400 --> 00:15:55,480 Speaker 1: site of many visits from high ranking members of the 249 00:15:55,480 --> 00:15:58,400 Speaker 1: Communist Party of China, and so there's a lot of 250 00:15:59,600 --> 00:16:04,400 Speaker 1: guests is that it was this political connection that gave 251 00:16:04,480 --> 00:16:08,640 Speaker 1: Huawei the advantage. Shen Jin named Huawei one of its 252 00:16:09,000 --> 00:16:13,000 Speaker 1: twenty six key development projects that have been selected for 253 00:16:13,080 --> 00:16:16,840 Speaker 1: state support, and state backed banks began to extend credit 254 00:16:17,000 --> 00:16:20,680 Speaker 1: to parties that were buying Huawei's products. So if you 255 00:16:20,760 --> 00:16:24,040 Speaker 1: were trying to build out an infrastructure, you were essentially 256 00:16:24,200 --> 00:16:28,880 Speaker 1: getting a sort of discount almost if you went with 257 00:16:28,960 --> 00:16:32,240 Speaker 1: Huawei over anyone else. At this point, we're still really 258 00:16:32,280 --> 00:16:35,720 Speaker 1: just talking about companies and governments, because again, Huawei's focusing 259 00:16:35,760 --> 00:16:39,480 Speaker 1: on networking technologies, not in consumer electronics, although the company 260 00:16:39,520 --> 00:16:42,880 Speaker 1: would start to do that later on. Huawei also received 261 00:16:42,960 --> 00:16:45,760 Speaker 1: large loans from the government in order to develop Chinese 262 00:16:45,760 --> 00:16:50,360 Speaker 1: operated GSM mobile phone infrastructure and technology, again to avoid 263 00:16:50,360 --> 00:16:54,520 Speaker 1: becoming dependent upon foreign companies. Huawei delivered upon that promise 264 00:16:54,720 --> 00:16:57,880 Speaker 1: and as a result, received even greater support from state 265 00:16:57,960 --> 00:17:03,000 Speaker 1: backed banks. For example, in nineteen, the China Construction Bank 266 00:17:03,360 --> 00:17:08,440 Speaker 1: extended three point nine billion ranmimbi. That's the official currency 267 00:17:08,520 --> 00:17:12,440 Speaker 1: of the People's Republic of China. Okay, but how much 268 00:17:12,840 --> 00:17:16,520 Speaker 1: is that in a different currency like US dollars three 269 00:17:16,560 --> 00:17:22,480 Speaker 1: point nine billion, Well, in the one, which is the 270 00:17:22,600 --> 00:17:26,120 Speaker 1: unit of currency for China, had an average exchange rate 271 00:17:26,160 --> 00:17:29,520 Speaker 1: of eight point to seven nine one to the US dollar. 272 00:17:29,800 --> 00:17:32,640 Speaker 1: So using that figure, we can estimate that this line 273 00:17:32,640 --> 00:17:36,280 Speaker 1: of credit was equivalent to about four hundred seventy one 274 00:17:36,480 --> 00:17:41,320 Speaker 1: million dollars in nineteen in US dollars. But then we 275 00:17:41,359 --> 00:17:44,200 Speaker 1: also should factor an inflation, right, because I mean we've 276 00:17:44,200 --> 00:17:49,800 Speaker 1: had inflation since nine So today that line of credit 277 00:17:49,840 --> 00:17:53,600 Speaker 1: would be worth about seven hundred forty one million dollars. 278 00:17:53,680 --> 00:17:57,320 Speaker 1: That's a lot of smack arooos. It represented nearly half 279 00:17:57,440 --> 00:18:00,960 Speaker 1: of all the credit this bank would exp end that year, 280 00:18:01,720 --> 00:18:05,200 Speaker 1: and it all went to one company. This is one 281 00:18:05,200 --> 00:18:08,280 Speaker 1: of the reasons why Huawei was able to grow so rapidly. 282 00:18:08,840 --> 00:18:12,760 Speaker 1: Had this enormous support of the Chinese government and financial 283 00:18:12,760 --> 00:18:16,240 Speaker 1: sector behind it. Coupled with the Chinese government's efforts to 284 00:18:16,280 --> 00:18:21,040 Speaker 1: suppress any sort of foreign competition, Huawei had no shortage 285 00:18:21,119 --> 00:18:25,359 Speaker 1: of domestic customers. You had railways, telecommunications companies, you had 286 00:18:25,400 --> 00:18:28,720 Speaker 1: the military, all having high demand for Huawei's equipment. On 287 00:18:28,800 --> 00:18:31,320 Speaker 1: top of that, the company began to enter into the 288 00:18:31,359 --> 00:18:35,200 Speaker 1: international market, and for a ton of reasons, Huawei's equipment 289 00:18:35,359 --> 00:18:38,159 Speaker 1: was much cheaper than most other products that were on 290 00:18:38,240 --> 00:18:42,680 Speaker 1: the market. Again, we're talking about big infrastructure, network switches, 291 00:18:42,920 --> 00:18:47,120 Speaker 1: telecommunications components, that sort of thing. So companies from other 292 00:18:47,160 --> 00:18:50,600 Speaker 1: countries began to order lots of equipment at essentially a 293 00:18:50,640 --> 00:18:54,280 Speaker 1: big discount compared to Huawei's competitors, and that brought a 294 00:18:54,320 --> 00:18:58,879 Speaker 1: welcome dose of foreign revenue into China, and all the 295 00:18:58,880 --> 00:19:02,560 Speaker 1: while the international community expressed surprise to see this kind 296 00:19:02,560 --> 00:19:05,240 Speaker 1: of technology emerge out of China in the first place. 297 00:19:05,240 --> 00:19:07,920 Speaker 1: A lot of people just didn't expect to see China 298 00:19:07,960 --> 00:19:10,639 Speaker 1: produce this kind of stuff. And what they didn't really 299 00:19:10,880 --> 00:19:14,600 Speaker 1: know or appreciate was that Huawei was pouring a ton 300 00:19:15,080 --> 00:19:18,000 Speaker 1: of money that it had secured in loans or made 301 00:19:18,000 --> 00:19:21,439 Speaker 1: in revenue back into research and development. I'm talking on 302 00:19:21,480 --> 00:19:25,239 Speaker 1: the order of billions of dollars to put all of 303 00:19:25,280 --> 00:19:29,080 Speaker 1: this onto a fast track, and it was occasionally lifting 304 00:19:29,119 --> 00:19:33,679 Speaker 1: designs from other companies and countries wherever it could uh, 305 00:19:33,840 --> 00:19:36,679 Speaker 1: sometimes to the point that would get it into trouble. 306 00:19:37,160 --> 00:19:39,919 Speaker 1: Now there's a lot we don't know about Huawei. Some 307 00:19:40,080 --> 00:19:43,199 Speaker 1: of that is around the technology they produce. We don't 308 00:19:43,200 --> 00:19:46,359 Speaker 1: necessarily know everything about it, and that raises a lot 309 00:19:46,400 --> 00:19:49,080 Speaker 1: of concerns. Some of it is in how much influence 310 00:19:49,160 --> 00:19:53,119 Speaker 1: the Chinese government has within the company that raises other concerns, 311 00:19:53,359 --> 00:19:54,960 Speaker 1: and some of it just has to do with how 312 00:19:55,000 --> 00:19:57,639 Speaker 1: the company itself is structured. So I'm going to go 313 00:19:57,680 --> 00:20:00,119 Speaker 1: through a little bit of what's been publicly report. Did 314 00:20:00,800 --> 00:20:04,800 Speaker 1: Huawei is, according to the company, privately held and owned 315 00:20:04,920 --> 00:20:09,000 Speaker 1: by the company's employees. It is not state owned, so 316 00:20:09,440 --> 00:20:13,080 Speaker 1: the government of China does not own and operate Huawei. 317 00:20:13,400 --> 00:20:16,879 Speaker 1: But it's also not publicly traded, and because no shares 318 00:20:16,920 --> 00:20:20,360 Speaker 1: of Huawei are on open markets, there are no requirements 319 00:20:20,480 --> 00:20:24,040 Speaker 1: for the company to share its financial reports, so there's 320 00:20:24,080 --> 00:20:28,000 Speaker 1: no auditing of Huawei's operations, and so much about what 321 00:20:28,119 --> 00:20:30,919 Speaker 1: is actually going on remains a bit of a mystery. Now. 322 00:20:30,960 --> 00:20:35,720 Speaker 1: According to Huawei, employees own virtual shares in the company. 323 00:20:35,760 --> 00:20:38,159 Speaker 1: The idea is that if you work for Huawei, and 324 00:20:38,200 --> 00:20:42,560 Speaker 1: if you are a Chinese citizen, then you can have 325 00:20:42,640 --> 00:20:45,639 Speaker 1: some equity in the company and share in some of 326 00:20:45,640 --> 00:20:48,280 Speaker 1: those profits. So by own, I don't mean they can 327 00:20:48,280 --> 00:20:52,800 Speaker 1: actually buy and sell shares. They earn an equity stake 328 00:20:52,840 --> 00:20:56,120 Speaker 1: in the company and they receive payouts based on company 329 00:20:56,160 --> 00:20:59,359 Speaker 1: and individual performance. Essentially, if you do a great job 330 00:20:59,400 --> 00:21:02,480 Speaker 1: at Huawei, you get awarded more shares, each of which 331 00:21:02,520 --> 00:21:04,840 Speaker 1: pays out a certain amount of money at a regular 332 00:21:04,880 --> 00:21:07,879 Speaker 1: interval based on profits in the company. It's meant to 333 00:21:07,920 --> 00:21:10,640 Speaker 1: be an incentive to attract top talent and to keep 334 00:21:10,680 --> 00:21:13,879 Speaker 1: it at Huawei, but there are some big qualifiers that 335 00:21:13,920 --> 00:21:16,879 Speaker 1: go along with this. One of those is that you 336 00:21:16,960 --> 00:21:19,800 Speaker 1: have to be Chinese to receive any shares in the 337 00:21:19,840 --> 00:21:22,440 Speaker 1: company at all. This is due to the laws of China. 338 00:21:22,760 --> 00:21:26,520 Speaker 1: No overseas employees of Huawei would be allowed to own 339 00:21:26,800 --> 00:21:30,760 Speaker 1: or be awarded shares in Huawei. Another is that you 340 00:21:30,800 --> 00:21:34,760 Speaker 1: can't sell those shares they you don't actually have something 341 00:21:34,800 --> 00:21:37,520 Speaker 1: you can sell at a market to someone else. That 342 00:21:37,600 --> 00:21:40,840 Speaker 1: shares themselves don't have a value the way a publicly 343 00:21:40,880 --> 00:21:44,600 Speaker 1: traded share would, so it sounds to me like they 344 00:21:44,920 --> 00:21:47,879 Speaker 1: more represent how much an employee will receive in what 345 00:21:47,960 --> 00:21:50,840 Speaker 1: amounts to bonus pay. If you were to leave the 346 00:21:50,880 --> 00:21:54,280 Speaker 1: employment of Huawei, the company would pay you the value 347 00:21:54,359 --> 00:21:58,240 Speaker 1: of those shares, whatever that value happened to be at 348 00:21:58,240 --> 00:22:01,360 Speaker 1: the time that you ended your employment with the company. 349 00:22:01,400 --> 00:22:05,359 Speaker 1: But again, there's no way to actually know how many 350 00:22:05,560 --> 00:22:09,399 Speaker 1: shares there are or what the individual value of a 351 00:22:09,520 --> 00:22:12,679 Speaker 1: share is at any given times, so I don't know 352 00:22:12,760 --> 00:22:14,680 Speaker 1: that you would even realize if you had been given 353 00:22:14,720 --> 00:22:17,879 Speaker 1: a fair deal or not. Shares then revert back to 354 00:22:17,920 --> 00:22:22,480 Speaker 1: the company, which could then award them to a different employee. UM, 355 00:22:22,600 --> 00:22:26,320 Speaker 1: I honestly don't know how legit this whole share thing is. Now. 356 00:22:26,320 --> 00:22:30,920 Speaker 1: According to Huawei ren himself, the founder, owns only one 357 00:22:31,000 --> 00:22:35,200 Speaker 1: point four percent of those shares, though other sources suggest 358 00:22:35,280 --> 00:22:38,440 Speaker 1: that he might actually own as much as five percent. Now. 359 00:22:38,480 --> 00:22:41,360 Speaker 1: To be fair, some of those reports are older reports, 360 00:22:41,440 --> 00:22:44,080 Speaker 1: and things could have changed between then and now, So 361 00:22:44,160 --> 00:22:47,040 Speaker 1: maybe he used to own five percent but now only 362 00:22:47,119 --> 00:22:51,240 Speaker 1: owns one point four percent. I'm not entirely certain. The 363 00:22:51,320 --> 00:22:53,240 Speaker 1: rest of the ownership of the company is said to 364 00:22:53,280 --> 00:22:57,200 Speaker 1: be split between the thousands of employees at Huawei now. 365 00:22:57,240 --> 00:23:00,800 Speaker 1: Back in an article in I t Who's stated that 366 00:23:00,920 --> 00:23:05,960 Speaker 1: according to Huawei, out of the nine thousand employees working 367 00:23:06,000 --> 00:23:09,880 Speaker 1: for the company, around sixty one thousand, four hundred and 368 00:23:09,920 --> 00:23:14,400 Speaker 1: fifty seven of them had shares in the company. Today, 369 00:23:14,440 --> 00:23:18,240 Speaker 1: about twice as many people work for Huawei, So the 370 00:23:18,240 --> 00:23:21,560 Speaker 1: company has around a hundred eighty thousand employees according to 371 00:23:21,560 --> 00:23:24,600 Speaker 1: a two thousand seventeen report, and again, not all of 372 00:23:24,600 --> 00:23:27,960 Speaker 1: those employees are eligible to hold shares. But again there's 373 00:23:27,960 --> 00:23:30,520 Speaker 1: no external auditing of Huawei to tell anyone whether or 374 00:23:30,560 --> 00:23:34,000 Speaker 1: not this is what is actually happening. One thing that 375 00:23:34,119 --> 00:23:37,040 Speaker 1: has been reported is that the company maintains an active 376 00:23:37,040 --> 00:23:41,400 Speaker 1: branch of the Communist Party within the company itself. This 377 00:23:41,600 --> 00:23:45,639 Speaker 1: isn't unusual for private companies in China or companies in 378 00:23:45,680 --> 00:23:48,800 Speaker 1: general in China. In fact, if a company employees at 379 00:23:48,920 --> 00:23:53,359 Speaker 1: least three party members, then by Communist Party rules, there 380 00:23:53,359 --> 00:23:57,040 Speaker 1: should be a committee formed within that company. Ten Cent, 381 00:23:57,240 --> 00:24:00,159 Speaker 1: another major tech company in China, has its own mean 382 00:24:00,200 --> 00:24:03,359 Speaker 1: this party committee. So does Ali Baba, and so this 383 00:24:03,440 --> 00:24:06,240 Speaker 1: continues to blur the lines between how much of Huawei's 384 00:24:06,240 --> 00:24:10,439 Speaker 1: operations are really that of a privately held company versus 385 00:24:10,520 --> 00:24:14,359 Speaker 1: a state run enterprise. There are a lot of unanswered 386 00:24:14,440 --> 00:24:17,480 Speaker 1: questions about how much influence does the Communist Party have 387 00:24:17,720 --> 00:24:21,720 Speaker 1: over the operations of these companies. And by the way, 388 00:24:22,119 --> 00:24:26,280 Speaker 1: the Communist Party involvement doesn't just include companies that originate 389 00:24:26,480 --> 00:24:30,760 Speaker 1: inside China. Plenty of foreign companies that operate within the 390 00:24:30,800 --> 00:24:35,280 Speaker 1: borders of China also have their own party committees. These 391 00:24:35,320 --> 00:24:39,200 Speaker 1: include companies like Walmart, which blows my mind because famously 392 00:24:39,280 --> 00:24:44,000 Speaker 1: Walmart opposes unionization in the United States, which is a 393 00:24:44,320 --> 00:24:48,800 Speaker 1: kind of a central theme in communism. But they have 394 00:24:49,080 --> 00:24:53,040 Speaker 1: party committees in Chinese operations because that's required if they're 395 00:24:53,040 --> 00:24:57,080 Speaker 1: going to operate within China. In fact, Walt Disney's interests 396 00:24:57,119 --> 00:25:01,320 Speaker 1: in China have Communist Party committees. Part of the cost 397 00:25:01,359 --> 00:25:04,600 Speaker 1: of doing business in China is dealing with the Communist Party, 398 00:25:04,960 --> 00:25:09,760 Speaker 1: and because business in China means billions of dollars, a 399 00:25:09,800 --> 00:25:13,000 Speaker 1: lot of companies are willing to make that trade, even 400 00:25:13,000 --> 00:25:16,960 Speaker 1: when it can get pretty sticky in some cases. Now moreover, 401 00:25:17,040 --> 00:25:21,600 Speaker 1: Huawei itself is actually a subsidiary. The parent company is 402 00:25:21,640 --> 00:25:26,160 Speaker 1: called shen Xin Huawei Investment and Holding Company, which oversees 403 00:25:26,200 --> 00:25:31,160 Speaker 1: the Huawei shareholding arrangement. And according to Huawei, employees own 404 00:25:31,240 --> 00:25:35,080 Speaker 1: Huawei Holding with no other outside parties, including the government. 405 00:25:35,680 --> 00:25:38,800 Speaker 1: No one else holds shares except for employees. But this 406 00:25:38,880 --> 00:25:43,399 Speaker 1: means that Huawei employees own both Huawei and the holding 407 00:25:43,440 --> 00:25:47,520 Speaker 1: company that quote unquote owns Huawei. See I told you 408 00:25:47,520 --> 00:25:51,920 Speaker 1: it was confusing. No matter who owns what, the executives 409 00:25:51,960 --> 00:25:55,200 Speaker 1: of Huawei control the whole thing, and the Communist Party 410 00:25:55,280 --> 00:25:58,879 Speaker 1: certainly has an interest in it. The corporate culture in 411 00:25:58,960 --> 00:26:02,200 Speaker 1: Huawei is similar to what you'll find in other businesses 412 00:26:02,200 --> 00:26:06,440 Speaker 1: in China. There's an emphasis on hard work. Employees frequently 413 00:26:06,520 --> 00:26:10,000 Speaker 1: work long hours, and not too long ago, the company 414 00:26:10,080 --> 00:26:13,120 Speaker 1: was known for having what was called a mattress culture. 415 00:26:13,960 --> 00:26:16,159 Speaker 1: Essentially that means you worked there until you were so 416 00:26:16,240 --> 00:26:19,840 Speaker 1: exhausted you would go and pass out on a mattress 417 00:26:19,880 --> 00:26:22,359 Speaker 1: inside the office. Like the office actually had rooms with 418 00:26:22,400 --> 00:26:25,480 Speaker 1: mattresses in them, and instead of going home, you would 419 00:26:25,520 --> 00:26:29,919 Speaker 1: just go collapse and fall asleep. The extremes went even further, 420 00:26:30,280 --> 00:26:33,480 Speaker 1: with one twenty five year old employee passing away in 421 00:26:33,520 --> 00:26:37,480 Speaker 1: two thousand six after contracting viral encephalitis, and it was 422 00:26:37,520 --> 00:26:40,760 Speaker 1: likely complicated by his habit of working long hours and 423 00:26:40,800 --> 00:26:44,119 Speaker 1: staying at the office overnight. There were also several cases 424 00:26:44,160 --> 00:26:48,760 Speaker 1: of employees committing suicide, and the implication was that exhaustion 425 00:26:48,920 --> 00:26:52,639 Speaker 1: and stress contributed to that problem. The company would end 426 00:26:52,720 --> 00:26:56,000 Speaker 1: up creating policies limiting overtime and would hire a person 427 00:26:56,040 --> 00:26:59,320 Speaker 1: to serve as the chief health and safety officer in 428 00:26:59,400 --> 00:27:04,400 Speaker 1: response to these issues. Huawei doesn't have a traditional executive 429 00:27:04,400 --> 00:27:09,080 Speaker 1: structure either. They're actually three executives who take turns serving 430 00:27:09,240 --> 00:27:13,480 Speaker 1: as CEO. They rotate out every six months. According to 431 00:27:13,520 --> 00:27:17,280 Speaker 1: the company, That about sums of the internal operations that 432 00:27:17,320 --> 00:27:20,280 Speaker 1: I can really report on with any level of confidence. 433 00:27:20,960 --> 00:27:24,399 Speaker 1: Next we'll talk about why Huawei has fallen under suspicion 434 00:27:24,480 --> 00:27:35,520 Speaker 1: in the Western world. But first let's take another quick break. Now, 435 00:27:35,520 --> 00:27:39,760 Speaker 1: before I dive into the incidents and accidents, hints and allegations, 436 00:27:40,080 --> 00:27:45,280 Speaker 1: let's establish some context. China, along with Russia and North Korea, 437 00:27:45,440 --> 00:27:48,320 Speaker 1: has been one of the major powers suspected of engaging 438 00:27:48,359 --> 00:27:53,440 Speaker 1: in cyber attacks, hacking, and espionage around the world. Now 439 00:27:53,520 --> 00:27:56,280 Speaker 1: I should add the United States as way up there too, 440 00:27:56,359 --> 00:27:59,320 Speaker 1: But because I live in the United States, that version 441 00:27:59,320 --> 00:28:02,680 Speaker 1: of the story get talked about very much around me. 442 00:28:03,000 --> 00:28:06,120 Speaker 1: But trust me, the US is definitely engaged in cyber 443 00:28:06,200 --> 00:28:11,520 Speaker 1: shenanigans at certain levels. Anyway, Huawei already has a somewhat 444 00:28:11,640 --> 00:28:17,480 Speaker 1: suspicious history even before we get to these questions about espionage. 445 00:28:17,680 --> 00:28:21,959 Speaker 1: In the early two thousands, US technology company Cisco sued 446 00:28:22,040 --> 00:28:25,120 Speaker 1: Huawei after discovering that some of the lines of code 447 00:28:25,160 --> 00:28:30,159 Speaker 1: in Huawei routers originated from Cisco. They were identical to 448 00:28:30,320 --> 00:28:34,199 Speaker 1: Cisco's proprietary code. So essentially this was a case of 449 00:28:34,240 --> 00:28:39,160 Speaker 1: stolen intellectual property and trade secrets. Huawei essentially copped up 450 00:28:39,200 --> 00:28:42,040 Speaker 1: to it, but with the qualification that the code came 451 00:28:42,080 --> 00:28:45,120 Speaker 1: from a third party partner and anyway, that the code 452 00:28:45,120 --> 00:28:47,840 Speaker 1: was really open on the Internet and the company really 453 00:28:47,840 --> 00:28:51,959 Speaker 1: did nothing wrong. This prompted Mark Chandler the chief legal 454 00:28:52,000 --> 00:28:55,160 Speaker 1: officer of Cisco, to respond in a blog post to 455 00:28:55,320 --> 00:28:59,440 Speaker 1: dispute Huawei's explanation as being a misstatement of the facts. 456 00:28:59,560 --> 00:29:03,720 Speaker 1: Rather than present Cisco's own argument, Chandler included an independent 457 00:29:03,760 --> 00:29:07,040 Speaker 1: investigator's findings on the matter. This was something that was 458 00:29:07,040 --> 00:29:11,800 Speaker 1: actually submitted in court. Chandler highlighted several of those findings 459 00:29:11,880 --> 00:29:14,760 Speaker 1: and pointed out that not only did it show Huawei 460 00:29:14,760 --> 00:29:18,280 Speaker 1: had copied code literally in some cases, copying and pasting 461 00:29:18,320 --> 00:29:21,880 Speaker 1: it white spaces and all, but that it went beyond 462 00:29:22,080 --> 00:29:24,560 Speaker 1: the sections of code that Huawei had said it had 463 00:29:24,640 --> 00:29:28,240 Speaker 1: removed from its products following these accusations. So, in other words, 464 00:29:28,880 --> 00:29:31,480 Speaker 1: there were parts of the Huawei said, oh no, we 465 00:29:31,480 --> 00:29:33,520 Speaker 1: were moved that we we found it. That was our bad. 466 00:29:33,680 --> 00:29:35,640 Speaker 1: We took it out. It's fine. But there were other 467 00:29:35,680 --> 00:29:39,600 Speaker 1: parts that Huawei never even acknowledged in its initial response. 468 00:29:39,960 --> 00:29:43,120 Speaker 1: The short version of this long story is that Huawei 469 00:29:43,160 --> 00:29:46,600 Speaker 1: was caught illegally copying the work of another company and 470 00:29:46,600 --> 00:29:48,800 Speaker 1: then tried to brush it off. It was an event 471 00:29:48,840 --> 00:29:53,640 Speaker 1: that cast Huawei's ethics, or lack thereof, into the limelight. Now, 472 00:29:53,680 --> 00:29:58,320 Speaker 1: because China's government maintains a deep, if not explicit relationship 473 00:29:58,400 --> 00:30:01,080 Speaker 1: with all industries within the count tree, and because that 474 00:30:01,160 --> 00:30:04,200 Speaker 1: government is controlled by the Communist Party of China, and 475 00:30:04,280 --> 00:30:08,520 Speaker 1: because that controlling party prioritizes remaining in power as the 476 00:30:08,640 --> 00:30:12,120 Speaker 1: most important component of overseeing the country, there's a lot 477 00:30:12,160 --> 00:30:15,800 Speaker 1: of concern about Chinese businesses. In general. Companies are eager 478 00:30:15,840 --> 00:30:18,600 Speaker 1: to take advantage of the low cost of producing stuff 479 00:30:18,600 --> 00:30:20,920 Speaker 1: in China. If you listen to my last episode, you 480 00:30:20,960 --> 00:30:23,840 Speaker 1: heard me talk about that. It's a huge boost to 481 00:30:23,920 --> 00:30:27,200 Speaker 1: the bottom line for foreign companies. You can make the 482 00:30:27,240 --> 00:30:29,280 Speaker 1: stuff for cheap and then sell it off at a 483 00:30:29,360 --> 00:30:32,240 Speaker 1: high price. But when it comes to buying technology that's 484 00:30:32,280 --> 00:30:35,440 Speaker 1: coming out of China itself, not being assembled in China, 485 00:30:35,760 --> 00:30:39,840 Speaker 1: but actually designed and manufactured in China, other concerns begin 486 00:30:39,920 --> 00:30:42,920 Speaker 1: to pop up. Now, that's not necessarily the fault of 487 00:30:42,960 --> 00:30:47,080 Speaker 1: companies operating within China. Those companies might have every intention 488 00:30:47,160 --> 00:30:50,560 Speaker 1: of remaining as neutral as possible in order to do business. 489 00:30:51,120 --> 00:30:53,840 Speaker 1: It's a smart business move. It means that nobody is 490 00:30:53,920 --> 00:30:57,080 Speaker 1: going to accuse you of doing anything wrong in that level, 491 00:30:57,520 --> 00:30:59,720 Speaker 1: and it's the best way to stay in business. But 492 00:30:59,800 --> 00:31:03,640 Speaker 1: that not necessarily possible with China's government or at least, 493 00:31:04,160 --> 00:31:08,120 Speaker 1: it's impossible for everyone to just accept a company's assurances 494 00:31:08,200 --> 00:31:11,360 Speaker 1: that it's not acting on behalf of a state backed 495 00:31:11,520 --> 00:31:15,920 Speaker 1: entity and face value. There's a perception that the possibility 496 00:31:15,920 --> 00:31:19,680 Speaker 1: exists for China's government to leverage a Chinese company in 497 00:31:19,720 --> 00:31:22,800 Speaker 1: an effort to gain information about other nations, and if 498 00:31:22,840 --> 00:31:26,720 Speaker 1: the perception is there, sadly, it doesn't really matter if 499 00:31:26,760 --> 00:31:30,520 Speaker 1: such a possibility really exists. The perception matters more than 500 00:31:30,600 --> 00:31:33,240 Speaker 1: reality does. It's kind of like when we talked about 501 00:31:33,360 --> 00:31:36,600 Speaker 1: the possibility of hacking a voting machine. If people show 502 00:31:36,880 --> 00:31:40,480 Speaker 1: that it's possible to hack a voting machine, that undermines 503 00:31:40,520 --> 00:31:45,400 Speaker 1: the public's confidence that such machines work, and it inserts doubt. 504 00:31:45,560 --> 00:31:49,560 Speaker 1: It inserts doubt that undermines the confidence we have in 505 00:31:49,640 --> 00:31:53,400 Speaker 1: election results, and that means it undermines democracy as a whole. 506 00:31:53,720 --> 00:31:55,920 Speaker 1: You don't even have to have a documented case of 507 00:31:56,000 --> 00:31:59,920 Speaker 1: actual election interference for this to negatively impact the demo 508 00:32:00,040 --> 00:32:03,560 Speaker 1: credit process. Well, the same thing is true for the 509 00:32:03,600 --> 00:32:08,560 Speaker 1: case of Chinese companies and fears of espionage. Many countries 510 00:32:08,600 --> 00:32:12,560 Speaker 1: have responded to this concern by limiting Huawei's involvement in 511 00:32:12,600 --> 00:32:15,640 Speaker 1: those countries. In two thousand and twelve, the United States 512 00:32:15,680 --> 00:32:20,960 Speaker 1: House Intelligence Committee recommended that American businesses avoid buying equipment 513 00:32:21,000 --> 00:32:25,520 Speaker 1: from Huawei and other Chinese telecommunications companies specifically because of 514 00:32:25,560 --> 00:32:29,200 Speaker 1: concerns over espionage. And the message has been pretty consistent 515 00:32:29,400 --> 00:32:34,320 Speaker 1: ever since. Now you might ask, is this fear justifiable? 516 00:32:34,440 --> 00:32:36,920 Speaker 1: I mean, yes, we know that many of these companies 517 00:32:36,960 --> 00:32:39,840 Speaker 1: have Communist committees in them, and we know that the 518 00:32:39,880 --> 00:32:43,200 Speaker 1: Communist Party in China is chiefly concerned with maintaining its 519 00:32:43,200 --> 00:32:46,240 Speaker 1: power in that country. And surely the Communist Party is 520 00:32:46,240 --> 00:32:50,160 Speaker 1: aware of the potential threat that powerful private companies could 521 00:32:50,400 --> 00:32:53,480 Speaker 1: be to the power structure in China. But that might 522 00:32:53,520 --> 00:32:56,080 Speaker 1: not be quite enough to justify the views we have 523 00:32:56,160 --> 00:33:00,000 Speaker 1: about companies like Huawei. So let's get to a measure 524 00:33:00,080 --> 00:33:04,520 Speaker 1: in twenties seventeen that really spelled it out and made 525 00:33:04,600 --> 00:33:09,560 Speaker 1: the threat apparent. On June two thousand seventeen, the Communist 526 00:33:09,600 --> 00:33:13,080 Speaker 1: Party of China passed a national intelligence law that has 527 00:33:13,120 --> 00:33:17,160 Speaker 1: caused for concern for many parties out there. Several articles 528 00:33:17,160 --> 00:33:20,440 Speaker 1: in the law state that intelligence agencies may ask quote 529 00:33:20,840 --> 00:33:27,480 Speaker 1: relevant institutions end quote to quote provide necessary support, assistance, 530 00:33:27,600 --> 00:33:32,960 Speaker 1: and cooperation end quote in those intelligence agencies efforts. So, 531 00:33:33,000 --> 00:33:36,040 Speaker 1: in other words, China's government passed laws that lay out 532 00:33:36,120 --> 00:33:40,600 Speaker 1: how government agencies can lean on companies to help collect 533 00:33:40,800 --> 00:33:45,280 Speaker 1: and provide intelligence to various government agencies. Since Huawei is 534 00:33:45,280 --> 00:33:49,000 Speaker 1: a communications company that has raised some serious concerns around 535 00:33:49,040 --> 00:33:51,840 Speaker 1: the world, why would you want a company to come 536 00:33:51,880 --> 00:33:55,200 Speaker 1: in and lay out communications infrastructure if you know the 537 00:33:55,240 --> 00:34:00,280 Speaker 1: government that oversees that company maybe leaning on it to 538 00:34:00,720 --> 00:34:04,880 Speaker 1: spy on people. Now, Ren the founder of Huawei, has 539 00:34:04,920 --> 00:34:07,480 Speaker 1: stated that Huawei would never engage in such behaviors. He 540 00:34:07,520 --> 00:34:09,440 Speaker 1: said that if the company were to do that, it 541 00:34:09,480 --> 00:34:12,200 Speaker 1: would betray their customers and it would hurt their business. 542 00:34:12,640 --> 00:34:16,680 Speaker 1: And that's true. But then people will also say, well, yeah, 543 00:34:16,719 --> 00:34:20,239 Speaker 1: but that's exactly what a spy would say. Denying the 544 00:34:20,239 --> 00:34:23,200 Speaker 1: company would ever collaborate with the Chinese government to collect 545 00:34:23,239 --> 00:34:27,680 Speaker 1: information paradoxically confirms the possibility in the minds of many. 546 00:34:27,760 --> 00:34:30,520 Speaker 1: And besides, Huawei might not even have a choice in 547 00:34:30,560 --> 00:34:33,240 Speaker 1: the matter should it come down to that. The company 548 00:34:33,239 --> 00:34:36,800 Speaker 1: continues to benefit from policies in China, and there's a 549 00:34:36,840 --> 00:34:39,920 Speaker 1: lot of speculation over how much leverage the government holds 550 00:34:39,960 --> 00:34:43,760 Speaker 1: over Huawei. Now, there are a lot of complicating factors 551 00:34:43,800 --> 00:34:46,880 Speaker 1: that make this a less than black and white matter. 552 00:34:47,120 --> 00:34:51,200 Speaker 1: For example, you could argue and persuasively. I might add 553 00:34:51,480 --> 00:34:53,759 Speaker 1: that efforts to keep Huawei out of countries like the 554 00:34:53,800 --> 00:34:57,239 Speaker 1: United States might be largely dependent upon keeping them out 555 00:34:57,280 --> 00:35:02,560 Speaker 1: of competition as domest stick companies or other foreign companies 556 00:35:02,600 --> 00:35:05,480 Speaker 1: from different parts of the world race to roll out 557 00:35:05,600 --> 00:35:09,920 Speaker 1: new infrastructures, namely for technologies like five G. Huawei is 558 00:35:09,960 --> 00:35:12,799 Speaker 1: a huge player in the five G space, holding more 559 00:35:12,840 --> 00:35:16,800 Speaker 1: patents on five G related technologies than any other company. 560 00:35:17,040 --> 00:35:19,560 Speaker 1: So I imagine there are a lot of telecommunications companies 561 00:35:19,600 --> 00:35:22,600 Speaker 1: out there who would love to see Huawei struck from 562 00:35:22,640 --> 00:35:24,920 Speaker 1: the playing field. They'd say, well, now we don't have 563 00:35:24,960 --> 00:35:27,880 Speaker 1: to compete against them, We can end up competing against 564 00:35:27,880 --> 00:35:30,400 Speaker 1: each other and have a better chance of getting way 565 00:35:30,440 --> 00:35:33,520 Speaker 1: more money because there are billions of dollars to be 566 00:35:33,560 --> 00:35:37,440 Speaker 1: made rolling out this sort of infrastructure. And you could argue, yeah, 567 00:35:37,520 --> 00:35:40,440 Speaker 1: that's that's dirty pool, that's not that's not playing fair, 568 00:35:41,000 --> 00:35:44,200 Speaker 1: you know, working to get a politician to to ban 569 00:35:44,360 --> 00:35:47,160 Speaker 1: an entire company from being able to operate in an area. 570 00:35:47,200 --> 00:35:50,200 Speaker 1: But then again, this is a very similar strategy to 571 00:35:50,239 --> 00:35:52,959 Speaker 1: how Huawei got so large and successful in the first 572 00:35:52,960 --> 00:35:56,200 Speaker 1: place back in China, because China had effectively done to 573 00:35:56,440 --> 00:36:01,040 Speaker 1: all telecommunications companies outside of its country what other countries 574 00:36:01,080 --> 00:36:04,960 Speaker 1: are now doing to Huawei. This doesn't necessarily make it right, 575 00:36:05,080 --> 00:36:07,400 Speaker 1: mind you, but there's a bit of a well you 576 00:36:07,480 --> 00:36:11,240 Speaker 1: reap what you sow going on here. Moreover, the fears 577 00:36:11,239 --> 00:36:14,000 Speaker 1: about espionage seemed to have more than a little weight 578 00:36:14,000 --> 00:36:16,880 Speaker 1: to them due to real world incidents that have happened 579 00:36:16,880 --> 00:36:20,480 Speaker 1: over the last couple of years. In a French newspaper, 580 00:36:20,760 --> 00:36:24,600 Speaker 1: La Monde Afrique reported that the computer system in the 581 00:36:24,640 --> 00:36:29,799 Speaker 1: African Union headquarters in Addis Ababa had been compromised. The 582 00:36:29,880 --> 00:36:34,200 Speaker 1: reports stated that every night, between midnight and two am, 583 00:36:34,200 --> 00:36:38,960 Speaker 1: this system was sending data clandestinely to servers in Shanghai, China, 584 00:36:39,320 --> 00:36:42,440 Speaker 1: and that this has been going on for five years straight. 585 00:36:42,960 --> 00:36:45,759 Speaker 1: The facility itself had opened in two thousand twelve. Now 586 00:36:45,800 --> 00:36:48,600 Speaker 1: here's the thing. The facility and its computer system had 587 00:36:48,680 --> 00:36:54,600 Speaker 1: essentially been designed and built exclusively by Chinese companies. Africa 588 00:36:54,719 --> 00:36:57,440 Speaker 1: and China have worked very closely together for rolling out 589 00:36:57,440 --> 00:37:00,879 Speaker 1: stuff like infrastructure, and so the implication year was that 590 00:37:01,000 --> 00:37:06,400 Speaker 1: those systems had purposeful backdoors built into them from the beginning. 591 00:37:06,719 --> 00:37:10,840 Speaker 1: In order to give Chinese intelligence agencies access to this data. 592 00:37:11,239 --> 00:37:15,080 Speaker 1: On those systems, there was just an ongoing data collection 593 00:37:15,200 --> 00:37:19,480 Speaker 1: system for the Chinese intelligence community, and yes, Huawei had 594 00:37:19,520 --> 00:37:24,120 Speaker 1: supplied much of the communications technology for that facility, though 595 00:37:24,160 --> 00:37:27,440 Speaker 1: Huawei would deny that any of its equipment had anything 596 00:37:27,480 --> 00:37:29,920 Speaker 1: to do with data transfers. On the other hand, it's 597 00:37:29,920 --> 00:37:33,359 Speaker 1: pretty hard to imagine a scenario in which Huawei, which 598 00:37:33,400 --> 00:37:37,840 Speaker 1: provided ongoing maintenance and support to this facility, would somehow 599 00:37:37,880 --> 00:37:41,400 Speaker 1: remain ignorant that this was going on through the whole time. 600 00:37:42,280 --> 00:37:46,200 Speaker 1: On December first, two thousand eighteen, Canadian officials detained Huawei's 601 00:37:46,280 --> 00:37:50,920 Speaker 1: chief financial officer Ming Wang Shao. Ming, by the way, 602 00:37:51,200 --> 00:37:56,720 Speaker 1: is also Huawei founder Ren's eldest daughter. The officials stopped 603 00:37:56,800 --> 00:38:00,600 Speaker 1: Ming as she was transferring flights in Vancouver. The reason 604 00:38:00,960 --> 00:38:04,160 Speaker 1: was that the United States had accused Ming of breaking 605 00:38:04,200 --> 00:38:09,279 Speaker 1: sanctions against Iran. Indictments followed accusing Ming of using falsified 606 00:38:09,320 --> 00:38:12,680 Speaker 1: information to hide business transactions with Iran, and a second 607 00:38:12,719 --> 00:38:16,360 Speaker 1: indictment was against the company itself, accusing it of attempting 608 00:38:16,400 --> 00:38:20,840 Speaker 1: to steal trade secrets from T Mobile and for obstructing justice. 609 00:38:21,440 --> 00:38:24,439 Speaker 1: The trade secrets case itself is more than a little 610 00:38:24,440 --> 00:38:29,320 Speaker 1: bit bizarre. It centers around a robotic arm nicknamed Tappy, 611 00:38:29,360 --> 00:38:32,600 Speaker 1: which can tap a mobile screen rapidly. The ideas that 612 00:38:32,600 --> 00:38:35,480 Speaker 1: it can mimic how humans can tap on screens. The 613 00:38:35,520 --> 00:38:39,239 Speaker 1: whole point is that it's used to test uh technology 614 00:38:39,320 --> 00:38:43,200 Speaker 1: like smartphones, test responsiveness, make sure that it's registering touches, 615 00:38:43,680 --> 00:38:46,840 Speaker 1: that sort of thing. Huahwei wanted to buy this technology 616 00:38:46,880 --> 00:38:50,279 Speaker 1: from T Mobile, but T Mobile decided not to do that. 617 00:38:50,719 --> 00:38:54,560 Speaker 1: Then a Huawei US employee was discovered with a Tappy 618 00:38:54,680 --> 00:38:57,360 Speaker 1: arm hidden in his bag as he was leaving a 619 00:38:57,440 --> 00:39:01,160 Speaker 1: T Mobile facility, and the Huawei play claims that the 620 00:39:01,239 --> 00:39:04,040 Speaker 1: robotic arm must have just, you know, just somehow fallen 621 00:39:04,400 --> 00:39:08,520 Speaker 1: into the bag. That's weird. Huawei, for its part, stated 622 00:39:08,560 --> 00:39:11,799 Speaker 1: that this employee was acting on his own, essentially taking 623 00:39:11,840 --> 00:39:14,120 Speaker 1: a leap of faith that he would be rewarded if 624 00:39:14,120 --> 00:39:16,799 Speaker 1: he could just get that robot arm back to Huawei. 625 00:39:17,360 --> 00:39:22,480 Speaker 1: And they said, well, we certainly didn't tell him to 626 00:39:22,480 --> 00:39:24,360 Speaker 1: do that. We would never do such a thing, and 627 00:39:24,360 --> 00:39:25,960 Speaker 1: if he had brought it back to us, we certainly 628 00:39:25,960 --> 00:39:29,360 Speaker 1: would have just returned it. I mean, that's just wrong. However, 629 00:39:29,400 --> 00:39:33,920 Speaker 1: there have been some reports of an email trail that 630 00:39:34,040 --> 00:39:37,799 Speaker 1: suggests perhaps company executives back in China were all too 631 00:39:37,840 --> 00:39:41,879 Speaker 1: aware of the attempted robo heist. I guess they could 632 00:39:41,920 --> 00:39:45,920 Speaker 1: say that they disarmed a robot. As of this recording, 633 00:39:46,440 --> 00:39:50,719 Speaker 1: Meng Wren's daughter, the CFO of Huawei, is still being 634 00:39:50,760 --> 00:39:53,640 Speaker 1: held in Canada, or at least really I should say, 635 00:39:53,640 --> 00:39:56,480 Speaker 1: she isn't being allowed to leave Canada. She did post 636 00:39:56,560 --> 00:40:00,040 Speaker 1: a ten million dollar bail back in December of in 637 00:40:00,120 --> 00:40:04,160 Speaker 1: the eighteen and she has an extradition hearing scheduled for 638 00:40:04,480 --> 00:40:07,680 Speaker 1: January twenty which could see her then go to the 639 00:40:07,800 --> 00:40:11,440 Speaker 1: United States for trial, but that is still an ongoing, 640 00:40:11,480 --> 00:40:14,600 Speaker 1: developing situation as of the recording of this podcast. In 641 00:40:14,640 --> 00:40:17,799 Speaker 1: the US, the government has banned the sale of any 642 00:40:17,880 --> 00:40:21,120 Speaker 1: Huawei phones, as well as phones from another Chinese company 643 00:40:21,160 --> 00:40:26,239 Speaker 1: called z t E, on military basis. Google has canceled 644 00:40:26,239 --> 00:40:29,719 Speaker 1: its Android license with Huawei, although there's been some ongoing 645 00:40:30,280 --> 00:40:34,800 Speaker 1: issues between Google and Huawei. Telecommunications companies in various countries 646 00:40:34,800 --> 00:40:37,959 Speaker 1: have started to replace Huawei components with technology from non 647 00:40:38,080 --> 00:40:42,120 Speaker 1: Chinese companies. Several have pledged not to use Huawei tech 648 00:40:42,160 --> 00:40:45,360 Speaker 1: while building out five G networks, though that isn't across 649 00:40:45,360 --> 00:40:48,120 Speaker 1: the board for everybody. The UK, for example, has agreed 650 00:40:48,160 --> 00:40:51,359 Speaker 1: to allow Huawei to build at least some parts of 651 00:40:51,400 --> 00:40:54,520 Speaker 1: the five G infrastructure, though not necessarily the whole thing. 652 00:40:55,160 --> 00:40:59,080 Speaker 1: A Huawei employee in Poland was arrested and accused of spying, 653 00:40:59,200 --> 00:41:04,000 Speaker 1: and the company's subsequently fired the employee. Vota Phone reported 654 00:41:04,040 --> 00:41:07,000 Speaker 1: that it had found hidden back doors in Huawei equipment, 655 00:41:07,520 --> 00:41:10,360 Speaker 1: although some people argue it's possible these were just overlooked 656 00:41:10,440 --> 00:41:14,439 Speaker 1: vulnerabilities and not intentionally left there. Either way, the tech 657 00:41:14,600 --> 00:41:17,879 Speaker 1: was deemed to be, you know, not cool to use 658 00:41:17,920 --> 00:41:22,760 Speaker 1: because it's it represents a security vulnerability. President Donald Trump 659 00:41:22,840 --> 00:41:26,600 Speaker 1: signed a National Security order effectively banning Huawei products in 660 00:41:26,600 --> 00:41:28,960 Speaker 1: the US, and then over the following months, that ban 661 00:41:29,080 --> 00:41:32,560 Speaker 1: has been waffling all over the place. It goes from extremes, 662 00:41:32,719 --> 00:41:36,400 Speaker 1: from absolutely no working with Huahwei too. Okay, you can 663 00:41:36,440 --> 00:41:38,960 Speaker 1: do some business with Hahwei, but you've gotta get approval first, 664 00:41:39,000 --> 00:41:41,719 Speaker 1: to all sorts of stuff in between. It's been a 665 00:41:41,719 --> 00:41:45,520 Speaker 1: big mess and it's still ongoing. Wren has objected to 666 00:41:45,600 --> 00:41:48,200 Speaker 1: many of these developments, which I guess is understandable. I mean, 667 00:41:48,239 --> 00:41:51,759 Speaker 1: his eldest daughter is not allowed to leave Canada. In 668 00:41:51,800 --> 00:41:55,520 Speaker 1: February of twenty nineteen, he lamented that the US treats 669 00:41:55,600 --> 00:41:59,680 Speaker 1: five G technology like military tech, which personally I find 670 00:41:59,680 --> 00:42:02,800 Speaker 1: a mute sing because Wren comes from a military background 671 00:42:02,920 --> 00:42:07,200 Speaker 1: and he's famous for quoting military sayings and applying them 672 00:42:07,200 --> 00:42:12,120 Speaker 1: to business, so I guess he should know. Anyway. I 673 00:42:12,200 --> 00:42:15,919 Speaker 1: hope that this episode kind of got a little more 674 00:42:16,239 --> 00:42:20,279 Speaker 1: perspective on what's going on with Huawei and why there 675 00:42:20,320 --> 00:42:24,280 Speaker 1: has been such a kerfuffle around the company, and also 676 00:42:24,400 --> 00:42:26,919 Speaker 1: just to understand how the heck it managed to get 677 00:42:26,960 --> 00:42:30,960 Speaker 1: so big so fast. Turns out, if you have lots 678 00:42:30,960 --> 00:42:34,560 Speaker 1: of money coming in from your country and you have 679 00:42:35,040 --> 00:42:39,719 Speaker 1: guaranteed protection against competition and no one is there to 680 00:42:39,800 --> 00:42:42,239 Speaker 1: stop you, if you steal other people's ideas, you can 681 00:42:42,280 --> 00:42:45,840 Speaker 1: get pretty big, pretty fast. So what is the future 682 00:42:45,880 --> 00:42:49,279 Speaker 1: for Huawei. Well, Ren's pretty confident that it's going to 683 00:42:49,640 --> 00:42:52,880 Speaker 1: do just fine, even with the US putting in a 684 00:42:52,920 --> 00:42:57,040 Speaker 1: band that it's not going to affect Huawei negatively. Moreover, 685 00:42:57,120 --> 00:43:00,520 Speaker 1: it'll affect the United States negatively. The u US, in 686 00:43:00,600 --> 00:43:04,439 Speaker 1: turn is saying, you know what, ways important and sure 687 00:43:04,840 --> 00:43:07,800 Speaker 1: they're going to be companies that have to license patents 688 00:43:07,880 --> 00:43:10,480 Speaker 1: from Huawei in order to get stuff done. But it's 689 00:43:10,520 --> 00:43:13,440 Speaker 1: not the only player in town. There are other telecommunications 690 00:43:13,480 --> 00:43:16,840 Speaker 1: companies that are very important in the rollout for five G, 691 00:43:17,239 --> 00:43:18,600 Speaker 1: so it's not going to be as big a deal 692 00:43:18,719 --> 00:43:23,120 Speaker 1: as the country and the company are suggesting. The truth 693 00:43:23,200 --> 00:43:26,440 Speaker 1: is probably somewhere in the middle. But that wraps up 694 00:43:26,480 --> 00:43:29,560 Speaker 1: this episode of tech Stuff. If you guys have suggestions 695 00:43:29,600 --> 00:43:34,040 Speaker 1: for future episodes, whether it's a technology, a company, maybe 696 00:43:34,040 --> 00:43:36,719 Speaker 1: it's just a concept in tech, let me know. You 697 00:43:36,760 --> 00:43:39,080 Speaker 1: can send me an email the addresses tech Stuff at 698 00:43:39,120 --> 00:43:41,520 Speaker 1: how stuff works dot com, or you can pop on 699 00:43:41,600 --> 00:43:44,359 Speaker 1: over to our website that's tech stuff podcast dot com. 700 00:43:44,400 --> 00:43:46,680 Speaker 1: You're gonna find links to where we are in social media. 701 00:43:46,920 --> 00:43:49,279 Speaker 1: You can reach out on Facebook or Twitter. I love 702 00:43:49,360 --> 00:43:52,760 Speaker 1: seeing people you know mentioned me on there. It's pretty 703 00:43:52,760 --> 00:43:56,880 Speaker 1: awesome usually, and you can also follow a link to 704 00:43:57,120 --> 00:44:00,040 Speaker 1: our online store, where every purchase you make goes to 705 00:44:00,080 --> 00:44:02,360 Speaker 1: help the show. We greatly appreciate it. Don't forget. We 706 00:44:02,400 --> 00:44:05,520 Speaker 1: have an archive of every single episode ever published on 707 00:44:05,600 --> 00:44:08,920 Speaker 1: tech Stuff over on that website. So if you've missed 708 00:44:08,920 --> 00:44:10,799 Speaker 1: an episode, let's say that you know you went to 709 00:44:10,800 --> 00:44:13,319 Speaker 1: sleep in two thousand and fourteen and didn't wake up 710 00:44:13,360 --> 00:44:15,520 Speaker 1: till the middle of two thousand and sixteen. Don't worry, 711 00:44:15,600 --> 00:44:17,520 Speaker 1: all those episodes are still waiting for you to listen to, 712 00:44:17,640 --> 00:44:19,600 Speaker 1: so go check those out and I'll talk to you 713 00:44:19,640 --> 00:44:27,160 Speaker 1: again really soon. Yeah. Text Stuff is a production of 714 00:44:27,160 --> 00:44:30,239 Speaker 1: I Heart Radio's How Stuff Works. For more podcasts from 715 00:44:30,280 --> 00:44:34,040 Speaker 1: my heart Radio, visit the i heart Radio app, Apple Podcasts, 716 00:44:34,160 --> 00:44:36,160 Speaker 1: or wherever you listen to your favorite shows.