Header graphic for print
China Law Blog China Law for Business

China Business (Huawei) Puts Money Over Politics. Hmmmm.

By Dan Harris on Posted in Recommended Reading

Very interesting Wall Street Journal article on how Huawei Technologies Company, China’s hugely successful telecommunications- equipment maker, will be scaling back its dealing with Iran.

I see this as a potentially very important milestone in that it seems to indicate that in some circumstances, even Chinese companies widely believed to be “tight” with Beijing will place their profits over politics. One case does not a trend make, but most trends do start with one.

What do you think?

  • http://foundinchina.com/ Stuart

    When I read that article a couple of days ago, it smacked of strategic BS on the part of Huawei in order to curry favour with other, more lucrative markets. In particular, the cited reason for the pullout: “following reports that Iranian police were using mobile-network technology to track down and arrest dissidents” just doesn’t sound right.
    I guess it could go either way, to be fair to Huawei: they could be demonstrating genuine distance between themselves and Zhongnanhai; or they are just as ‘tight’ as some believe (myself included), and are trying to create the appearance of distance.

  • Twofish

    Or maybe it is politics. Iran is starting to annoy a lot of people in China, and there is a power struggle between Iran and Saudi Arabia and if push comes to shove, China will choose Saudi Arabia. I don’t think that Saudi Arabia has been less repressive than Iran. It’s just that Saudi Arabia is not trying to build a nuclear bomb, and another nuclear power is something that the Chinese government doesn’t want to see.
    In any event, there are a ton of ways that you can make money by selling technology without getting bad publicity and Huawei just needs to learn from US companies those tricks (learn from google).

  • Twofish

    One other trick that Huawei has learned from Western companies and politicians is to make a statement, then make a statement that weakens the first statement. News reports will quote the first statement and remove the second statement.
    The original press release says:
    Due to the increasingly complex situation in Iran, Huawei will voluntarily restrict its business development there by no longer seeking new customers and limiting its business activities with existing customers. For communications networks that have been delivered or are under delivery to customers, Huawei will continue to provide necessary services to ensure communications for Iran’s citizens.
    And note that when FT reported the statement, they forgot about the second line
    http://www.ft.com/intl/cms/s/0/d244cf16-2276-11e1-923d-00144feabdc0.html#axzz1gOYtqa00

  • http://www.twitter.com/martijnherrman Martin

    As far as I can tell, and while doing research in the field of propaganda and Chinese (web) media, I strongly have the impression that money is always chosen over politics, and this incentive is coming from Chinese politics itself.
    Illustrative example: Facebook is blocked, but that doesn’t stop Chinese online gaming companies from developing social games in China for the very same Facebook. Everyone working for these companies is on Facebook every day, in the office. Politics are nice, but when it comes to making money, profit always seems to be of higher importance, if you ask me.