Huawei is one of China’s most
successful global companies. Its technology is used in
more than 170 countries and its smartphones rival Samsung
and Apple for market share. But some countries, including the United States,
have expressed concerns that the Chinese government could use Huawei’s phones
and equipment for spying. That’s on top of allegations like stealing
trade secrets and bank fraud. Now Huawei’s future is under threat as it
finds itself in the eye of a geopolitical storm. Huawei, which can be translated to
mean “splendid act” or “China is able,” was founded in 1987, in the southern
Chinese city of Shenzhen. Its founder and CEO is Ren Zhengfei, a former officer
and engineer in the Chinese People’s Liberation Army. Back then, it was a scrappy upstart, selling telephone
switches produced by another company in Hong Kong. In the 1990s, it started doing its own research
and toward the end of the millennium, opened several research
centers globally. Following that research, Huawei became
capable of developing its own products, which were sometimes up to 25%
cheaper than its competitors. And it began to expand
its reach worldwide. Today, Huawei is probably best known for being
one of the world’s biggest smartphone makers, alongside Samsung and Apple. It’s also the globe’s largest provider
of telecommunications equipment. It has built more than 1,500 networks worldwide,
connecting a third of the planet’s population. Huawei employs around 180,000 people and says
its revenue for 2018 was about $107 billion. But amid all its commercial success, the company has
been dogged by allegations of breaking laws for profit. Controversy has followed Huawei as far back as 2003
when Cisco systems sued the Chinese company for infringing on numerous patents and
illegally copying some software code. However, the lawsuit
was eventually dropped. Then following an investigation in 2012, U.S.
lawmakers warned telecom operators against doing business with Huawei and its rival ZTE,
citing long-term security risks associated with the companies’
equipment and services. At the start of 2018, U.S. telecom conglomerate
AT&T suddenly dropped a deal to sell Huawei’s new Mate 10 Pro after lawmakers
once again expressed concerns about Chinese companies
in the U.S. telecoms industry. ...China attempts to
steal our private data. A month later, six top U.S. intelligence
chiefs warned American citizens against using products and services by
Huawei and ZTE, with the FBI saying: Huawei says Beijing has no ownership stake
or control over the company and that it would never hand over data to the Chinese government,
nor has it ever been asked to do so. Still, experts have been skeptical about those
assurances, pointing to Chinese laws that allegedly mean that every domestic company is legally mandated
to assist the country in intelligence gathering. It's also thought they're forbidden from
talking about any intelligence work. Experts say these laws mean the
company would have no choice but to hand over data to the Chinese
government if it asked for it. Another point of contention for the U.S. government
has been the alleged violation of American sanctions. Huawei’s rival ZTE nearly collapsed after
being hit with a U.S. ban in April 2018, for violating U.S. sanctions
to Iran and North Korea. That was only lifted after the company paid a
$1 billion fine and allowed U.S. enforcement officers unfettered access to
monitor the company’s actions. Then in December, Meng
Wanzhou, Huawei’s CFO and daughter of its billionaire
founder, was arrested in Canada. That was done at the request of the U.S. government,
which made a formal request for her extradition over alleged violations of
U.S. sanctions against Iran. Just hours before Meng's arrest, U.S. President
Donald Trump and his Chinese counterpart XiJinping had agreed to a 90-day pause in launching
new tariffs in their ongoing trade war. The timing of her arrest led to accusations
in China that it was politically motivated, and part of a larger witch hunt
against Chinese companies. Things escalated from there. At the start of this year Congress introduced
a bill that would, if passed, systematically ban U.S. companies from selling
technology to any Chinese firm found to have violated
export controls or sanctions. A few weeks later, Huawei and several of its affiliates
were hit with 23 charges from the U.S. government, including bank fraud, stealing corporate secrets, obstructing justice and yes, violating U.S. sanctions on Iran. The Chinese company relies on American
chip providers like Intel and Qualcomm. And while it’s still eager to slash
its dependence on them, being cut off from those technologies
would still be a major blow. But it’s 5G, the super fast network that's being designed
to support the next generation of the internet, that may play a decisive role in
Chinese tech’s future relationship, not just with the U.S., but
also the rest of the world. That’s because Huawei is among
the top corporate 5G developers. Huawei has poured more than a billion dollars
into 5G research and patenting key technologies. And it’s paid off. As of February 2019, Huawei held the
most standard essential patents in 5G. So why are patents so important? Well, in the future, any sector with a reliance
on connectivity, like transport or energy, will need to pay
5G patent royalties. That means a company with
a lot of patents, like Huawei, has significant control over the
future development of the network. Huawei has also contributed the most to
the development of the 5G standard, according to market
intelligence platform IPlytics. Huawei’s place at the forefront of the
technology poses problems for countries that see the company as a
threat to national security. Australia, New Zealand and Japan have joined
the U.S. in banning Huawei’s 5G equipment from entering their respective countries in a bid to
defend against intelligence leaks and cyber attacks. This has impacted companies using Huawei
equipment to develop 5G Networks. For example, Australian company TPG
Telecom had to abandon its plans of developing a 5G mobile network
using Huawei-supplied equipment. The Chinese government and media
outlets claimed that the U.S. was lashing out at Huawei
to hurt the growing business. And one of Huawei’s top bosses
has accused the U.S. of having a “loser’s attitude”
because it couldn’t complete. The company warns cutting it out of the race
will slow 5G’s roll out and increase costs, but governments have pushed back, saying they
can’t put a price on the security of their nations. As countries barrel toward 5G technology, expect
Huawei to continue making headlines worldwide. Hi guys, thanks for watching our video
here from Mobile World Congress. We'd love to hear your thoughts on Huawei, what
do you think of their products, do you buy them? Comment below the video to let us know
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