Once upon a time there was Huawei: a company at risk

July 2020. Huawei becomes the company that has shipped the largest number of smartphones in the world. With 55.8 million devices, the Shenzhen giant also surpasses Samsung and Apple, climbing to the top step of the podium. Despite pressure from the United States globally to isolate a company they deem a ‘security threat’ and in relations with the Chinese government and military.

August 2022. Just over two years after that triumph, Huawei’s founder declares that the company is fighting not to die. ‘The most important program is survival,’ wrote Ren Zhengfei in an article (unconfirmed and not denied) on the company’s internal forum. ‘The too optimistic expectations for the future must be corrected, and in 2023 or even until 2025, we must adopt the survival mode’, adds Ren, who then makes a call to concreteness: ‘Fancy stories are not acceptable. Especially when it comes to trade forecasts, we must rule out all illusions.’ Also because the founder of what was until recently the flagship of Beijing’s technological development claims that the problem is larger than Huawei, larger than China. And that the world will go through a decade of economic recession. Ren said Huawei needs to change its corporate policy, focusing on profits and cash flows instead of revenue and sales. Adding that the company will reduce marginal activities, which opens up the possibility of new cuts after the first reduction in employees (about two thousand) since 2008 was recorded in 2021.

Huawei victim of the tech war between the United States and China.

To understand how the situation has changed so drastically in the space of two years, however, it is necessary to move the hands even further back. To be exact as of December 1, 2018. That is the day when not only the history of Huawei changes, but also that of relations between the United States and China. That day, Meng Wanzhou, the financial director of Huawei and daughter of Ren, was arrested in Canada. Her arrest was the trigger pulled by the then President of the United States, Donald Trump, to make Beijing understand that Washington was not just looking for a mere rebalancing of the trade balance. Other than a simple trade war, the issue wasn’t just duties and tariffs.