10,000-word article! Huawei Chairman Liang Hua's exclusive interview with Canadian media

No matter what Canada decides, Huawei will continue to serve local customers well

1. CCTV Toronto, Sen Zhang: Huawei is now in a difficult period in its history. Do you have a strategy or plan to deal with such difficulties?

Liang Hua:

Huawei is a global company with operations in more than 170 countries. Given the scale of our operations, we may face challenges and difficulties at any time, but at the same time, we believe there will be many opportunities. In 2018, Huawei's performance was very good, with total revenue of nearly US$108.5 billion, a year-on-year increase of 20%.

In the new year, we will formulate business plans based on the current global operations. Although we may face some challenges in 2019, our current business plan and goal is to achieve sales revenue of about US$125.4 billion in 2019, a year-on-year increase of 15% to 20%. Looking to the future, we will solve difficulties and challenges, and at the same time, we will seize opportunities in the process of digitalization, intelligence, and cloud computing. At present, we are still confident in the development of our business.

2. Shruti Shekar, MobileSyrup: Last week, the BBC interviewed Mr. Ren Zhengfei and asked, "Will the UK ban the use of Huawei equipment?" At that time, Mr. Ren said, "We trust the UK and hope that the UK will trust us more." Now, Canada is also conducting relevant assessments, and the results are still unknown. What I want to ask is, assuming that Canada decides to ban the use of Huawei equipment after the assessment, what impact will this have on Huawei's investment in Canada?

Liang Hua:

We have been operating in Canada for ten years and have had some very good cooperation with our customers. At the same time, we have also made long-term R&D investments in Canada, with a cumulative amount of more than 500 million US dollars. We don't know what decision the government will make on 5G, but no matter how the government decides, as long as our customers choose to cooperate with Huawei, we will bring better 5G technology, solutions and products to the Canadian market. If Huawei is excluded from Canada's 5G deployment, we will continue to be committed to better serving our customers who choose us. But in any case, we hope that the decision on 5G is based on technical considerations rather than other factors. We hope to make 5G-related decisions based on technology under the premise of fair competition. Huawei has very strong advantages in 5G technology and engineering capabilities.

Back to your question, no matter what decision the government makes in the end, we will continue to serve our customers in Canada. Huawei has a long-term good cooperation with customers such as Telus and Bell in Canada. Even if the government decides to exclude Huawei from participating in 5G, we will continue to better serve our customers in other products and networks. At the same time, we will continue to increase our R&D investment in the Canadian market, because the Canadian market is open and inclusive, and has cultivated many R&D talents. As mentioned earlier, our cumulative R&D investment in Canada has exceeded US$500 million in the past decade, with an investment of US$137 million in 2018 alone. In the future, we will continue to increase our R&D investment in Canada based on business strategies and R&D cooperation.

3. Paul Bagnell, BNN Bloomberg: Currently, three countries have banned the use of Huawei's telecommunications equipment due to security and espionage concerns. At least three former Canadian intelligence officials have also recommended that the Canadian government take the same approach as these three countries. What assurances can you give to Canadian policymakers and ordinary people to convince them that using Huawei's equipment will not pose a security threat?

Liang Hua:

First of all, let me correct that there are only two countries, the United States and Australia, not three. This week, the Prime Minister of New Zealand said that there is no decision to restrict the use of Huawei equipment in 5G deployment. So there should be only two countries. The United States does not allow the purchase of Huawei equipment and services in government procurement, and Australia prohibits Huawei from participating in 5G deployment. In fact, Huawei only provides wireless equipment in Canada, and guarantees security through the government-led Security Review Mechanism (SRP). SRP is a review mechanism jointly cooperated by the government, operators, Huawei, and third parties to provide protection for the wireless products we supply to Canada. Network security and privacy protection are Huawei's top priorities. We will also continue to invest $2 billion in the next five years to enhance software engineering capabilities and practices to help us develop more reliable, trustworthy and high-quality products and solutions in the new cloud-based, intelligent, and software-defined environment.

Over the past three decades, Huawei has operated in more than 170 countries and served more than 3 billion users, and has maintained a good cybersecurity record to date. Huawei is an independent commercial company and will never harm any country, organization or individual on cybersecurity issues. In terms of cybersecurity and privacy protection, Huawei insists on being customer-centric, always standing with customers, and working with customers to ensure cybersecurity.

Cybersecurity is an issue that the entire industry and even the entire society need to pay attention to. Huawei is just one of the equipment providers in the industry. GSMA has proposed that the government and operators need to work together to establish a unified cybersecurity testing and certification mechanism to enhance the public's confidence in cybersecurity. Therefore, in terms of cybersecurity, I suggest that the Canadian government, mobile operators and equipment suppliers jointly formulate clear standards and guarantee mechanisms to enhance the public's confidence in network products and services. These cybersecurity standards, specifications, and manufacturer and equipment selection mechanisms should be consistent and fair to all manufacturers.

"China has no laws requiring companies to install backdoors or collect intelligence."

4. Ray Chan, Sing Tao: China's newly revised National Intelligence Law clearly stipulates that Chinese citizens and organizations have the obligation to cooperate with the work of intelligence agencies. Although Huawei has business in Canada, it is still a Chinese company. How can you ensure that Canadian data will not be used by Chinese intelligence agencies?

Liang Hua:

Regarding the National Intelligence Law of China that you just mentioned, the Chinese Ministry of Foreign Affairs has made it clear that "China has no laws requiring companies to install backdoors or collect intelligence." Chinese official Yang Jiechi also made it clear at the Munich Security Conference last week that China has no laws requiring companies to install backdoors and collect intelligence. At the same time, the Chinese government has always required Chinese companies to abide by the laws and regulations of the countries where they operate.

We also consulted legal advisers and asked them to provide independent legal opinions. They pointed out that requiring companies to fulfill their obligations to assist and support the work of intelligence agencies must have a legal basis. There is no law in China that requires telecommunications equipment manufacturers to implant backdoors or collect intelligence.

We have never received such a request in the past 30 years. Even if there is such a request in the future, we will refuse to execute it, because refusing to execute it is not illegal and we will not bear legal responsibility. Huawei is an equipment supplier and the operator is responsible for network operation. Huawei has been operating in Canada for ten years and has maintained a good record. So, everyone can rest assured.

Huawei and Canadian universities negotiate to finalize research cooperation mechanism

5. Jacquie McNish, Wall Street Journal: China has a 30% market share limit for technology companies and telecom operators. However, other countries do not have such restrictions. Does Huawei realize that it needs to follow different rules when doing business in countries outside of China?

Liang Hua:

Huawei complies with all applicable laws and regulations in the countries where it operates. This is our bottom line. In some countries, we adopt different business strategies based on business strategies and national requirements. The reason why we increase our R&D investment in Canada is that Canada does have talent advantages in many fields (including artificial intelligence, basic algorithms, optical fiber, etc.).

Now, the United States prohibits Huawei from exporting certain technologies, so it is understandable that we have transferred some of our research projects to Canada.

We have adopted different cooperation mechanisms in different countries. The research cooperation mechanism between Huawei and Canadian universities was jointly finalized through consultation between the two parties. We will continue to communicate with Canadian universities and establish a cooperation mechanism based on the principle of win-win cooperation. The current cooperation model is: the copyright of articles, papers, etc. belongs to the university (professors, students); if a patent is generated in the cooperation project, Huawei and the university share the patent. Sharing patents is a consensus reached by both parties in the cooperation.

Jacquie McNish: Does patent sharing mean a 50-50 split?

Liang Hua:

It is not a simple split. Both parties jointly own the patents, and there is no specific ratio. The common practice in the industry is that if a patent is generated during the cooperation between an enterprise and a university, the enterprise obtains the ownership of the patent. At present, the patents generated by Huawei's cooperation with universities are shared by Huawei and the universities.

6. Christine Dobby, Globe and Mail: Regarding the intellectual property issue you just asked. If the intellectual property is shared by Huawei and universities, can Canadian companies also obtain the intellectual property through licensing? Are there any preferential conditions for them? In addition, why did Huawei choose to adopt such a sharing and cooperation approach at this time? Do you hope to persuade the Canadian government not to ban Huawei from participating in the 5G project in this way?

Liang Hua:

Intellectual property sharing has nothing to do with the 5G project. We have implemented an intellectual property sharing strategy before this. The industry already has standard procedures and methods for obtaining and licensing intellectual property. Regarding the specific sharing and use of intellectual property, please ask our R&D director to provide more detailed explanations.

Cai Changtian:

The intellectual property rights generated by Huawei Canada and Canadian universities include two parts:

First, the copyright of the paper belongs entirely to the university, including professors and students.

Second, patents. It should be noted here that not every cooperative project will generate patents, which is also one of the manifestations of research uncertainty. In terms of patent ownership, Huawei Canada has always followed industry practices and the intellectual property rules of each partner. In the past decade, some cooperative patents belong to the school, some to individual professors, and some are shared by universities and Huawei. In order to better highlight Huawei's R&D investment in Canada and the direct contribution of Huawei's cooperation with Canadian universities to Canada, we have been fully sharing intellectual property since 2018.

Huawei is just an equipment supplier and does not own customer information and networks.

7. Sam Yu, Ming Pao Daily News: Huawei operates globally. What kind of market is Canada in the global perspective? What are its characteristics? What are its advantages and disadvantages?

Liang Hua:

Last year, Huawei's sales revenue in Canada was approximately US$420 million, of which carrier business was approximately US$270 million and terminals were approximately US$150 million. Huawei's global business strategy is to focus on ICT infrastructure and smart terminals. This is also true in Canada, where we sell ICT infrastructure, solutions and smart terminals and provide corresponding services.

The Canadian market is unique, with a vast territory and sparse population, and not everyone can enjoy the same digital dividend. For example, the southern part of Canada is densely populated, while the northern part is cold and sparsely populated. How can we develop effective and economical solutions to provide high-quality services to all Canadians? To this end, we work with local operators to jointly develop innovative technical solutions to provide services to people in different regions.

Huawei first started 5G research in Canada. Huawei's headquarters team, Huawei Canada R&D team and local partners worked together to conduct 5G research. The 5G solutions we are developing now will meet the needs of different regions. In the north, if traditional satellites are used, the network quality and signal are very poor; if optical fiber is used, the cost is too high. For this reason, we launched 5G Air Fiber, which can provide high-quality, high-quality home broadband services (WTTx) and is cost-effective. WTTx can greatly shorten the return on investment cycle to only two to three years. If optical fiber is used to cover these areas, the return on investment cycle is as long as eight to ten years.

By working with our partners and operators across Canada, we will deliver more advanced and cost-effective communications technology.

8. Jie Yang, OMNI TV: Although the UK announced last week that Huawei's security system can be resolved and there is a solution, Huawei's reputation has been affected in the Western world, especially after some unpleasant things happened between Canada and China. What is Huawei going to do to restore its reputation and make Canadian people or customers believe that you are still safe and reliable?

Liang Hua:

I don't think this has any negative impact on our company's reputation. It's actually free advertising for Huawei. Now, the world knows that the United States is calling on its allies to suppress and exclude Huawei. People all over the world know Huawei and know that such a powerful country as the United States pays close attention to Huawei.

I actually just talked about our future plans. Cybersecurity and privacy protection are challenges faced by the entire industry and the world. If cybersecurity and privacy cannot be guaranteed, the entire digital world may collapse. Cybersecurity and privacy protection are not the responsibility of a single company. Excluding Huawei will not solve the problem of cybersecurity and privacy protection. Therefore, I suggest that the government, operators, equipment suppliers and other professional companies work together to develop unified cybersecurity standards, certification, testing mechanisms and network assurance mechanisms. This is crucial.

Regarding Huawei's business in Canada, as I just said, Huawei regards cybersecurity and privacy protection as the highest principle of the company. Huawei is a commercial company and always considers the interests of customers. We have strict processes and corresponding tools to ensure security and privacy in product development, operation and sales to customers.

Huawei is only an equipment supplier and does not own customer information or networks, because the networks and user information are in the hands of operators. The equipment we provide has also undergone strict network security reviews led by operators and the government. We will only provide necessary technical services when customers have needs and with the authorization of operators.

Europe has introduced the General Data Protection Regulation (GDPR), and Huawei strictly complies with the GDPR. We believe that the GDPR provides a model for other countries because it not only sets clear standards and requirements, but also treats all companies equally and fairly. In Europe, as long as you follow these regulations, you can operate well there. Similarly, in Canada, Huawei will strictly comply with the Security Review Mechanism (SRP) led by the Canadian government and laws and regulations related to cybersecurity and privacy protection.

9. Rena Li, China Daily: I would like to ask Mr. Li a few questions. Mr. Liang just mentioned that Huawei has made a lot of investments in Canada, including R&D and cooperation with Canada's three major network giants. If Canada's ban on Huawei's participation in 5G network construction takes effect, what will be the loss to partners? What will be the loss to local employment? In addition, over the past decade, Huawei Canada has actively given back to the community, such as funding local ice hockey programs and Aboriginal youth leadership programs. Why do you do this?

Li Hongbo:

Huawei has been operating in Canada for ten years. Over the past decade, our business has maintained steady growth. Since last year, we have noticed that the government will make 5G-related decisions. In fact, in addition to 5G (which is not available yet), Huawei also sells other products and services in Canada, such as the smartphone business and other network products mentioned by the chairman just now.

Liang Hua:

Whether to ban or not is the choice of the government and customers. Huawei cannot serve all markets around the world. For customers who choose us, we will definitely serve them well. For those who do not choose us, unfortunately we have no chance to serve them.

The evaluation results of a third-party organization show that Huawei's end-to-end 5G solution is more than a year ahead of the market. This shows that Huawei has a great advantage in technology and cost-effectiveness of 5G solutions. In the past, Huawei has cooperated with operators and supported their network development very well. At present, Huawei has signed more than 30 5G commercial contracts worldwide, shipped more than 30,000 5G base stations, and holds more than 2,570 5G patents.

“I can’t say the Meng Wanzhou incident was not politically driven”

10. Matt Scuffham, Reuters: Will the arrest of Huawei’s CFO affect Huawei’s business in Canada?

Liang Hua:

After Meng Wanzhou was arrested, many senior officials in the United States and Canada made a lot of comments. As far as I know, it is very rare to accuse and arrest a company's senior management for alleged violations of relevant US sanctions laws. Even former Canadian diplomats have said that the political nature of the US extradition request is a good defense. So I can't say that the Meng Wanzhou incident is not politically driven.

I have worked with Ms. Meng for many years. She is a very hardworking female executive and a mother of young children. I believe she is innocent and hope that the Canadian judicial system will quickly restore justice to Ms. Meng, restore her personal freedom, and reunite her with her family. I am not a lawyer, so I cannot comment on the merits of the case.

Frankly speaking, the current China-Canada relations are not as ideal as most Chinese and Canadian people and companies expect. In the past 10 years, we have invested more than 500 million US dollars in R&D in Canada and employed more than 1,100 local employees. As a company, we sincerely hope to conduct business under the good relations between the two countries. I think this is also the common wish of Chinese and Canadian companies. Of course, from the current point of view, there are indeed some problems that need to be solved.

Matt Scuffham: Will this affect Huawei's future business strategy?

Liang Hua:

Our R&D investment strategy will not change, and we will continue to increase R&D investment in Canada. In the market, we hope to better cooperate with operators and better serve customers with advanced technologies, products and solutions.

11. Lindsey Wiebe, New York Times: Back to the intellectual property issue just mentioned, Huawei just introduced that it launched an intellectual property sharing mechanism since 2018. Why choose to make such a statement again today? I know that today's media event is unusual, and it must be the first time for the chairman to hold such a media event in Canada.

Liang Hua:

There is no other reason, it is because of this opportunity today. I hope there will be more opportunities to communicate with you in the future.

12.Josh Wingrove, Bloomberg News: What is Huawei’s position on the allegations made by the United States, including those related to T-Mobile?

Liang Hua:

Regarding the T-Mobile case, Huawei has issued an official statement, and I believe you should have seen it.

Josh Wingrove: Yes, I saw that statement, but I wanted to ask you to elaborate on that. Do you think that these allegations made by the United States will affect Canada's ongoing assessment and Canada's decision?

Liang Hua:

Prosecution is not conviction. Since the legal process has already begun, it should be resolved according to the legal process. I have no further comments on the case itself. In the 2017 civil case, all disputes between Huawei and T-Mobile have been properly resolved through legal procedures. Regarding T-Mobile's claim of trade secret infringement, the jury has made a verdict that there was no loss, Huawei did not make unjust enrichment, and there was no subjective malice.

Regarding intellectual property rights, Huawei has experienced many intellectual property disputes in the United States, all of which have been properly resolved through legal procedures and have achieved good results. This shows that we respect the intellectual property rights of third parties. Huawei has obtained more than 87,000 authorized patents worldwide, of which more than 11,000 are authorized in the United States. Complying with intellectual property rights is Huawei's consistent policy. We respect the intellectual property rights of others and hope that others will respect our intellectual property rights. This has no impact on our market operations in Canada.

Innovators and contributors should be respected

13. Kyle Kong, Fairchild TV: There is no doubt that Huawei is a leader in 5G. There have been many accusations against Huawei, some of which can be said to be conspiracy theories. There are news reports that Huawei's leading position in 5G is related to its military background. Do you want to take this opportunity to comment or clarify?

Liang Hua:

Huawei has no military background. It is a private company owned by more than 97,000 employees, and no external organizations hold any shares in Huawei.

Huawei is leading in 5G because we invested in 5G research early and continued to increase technology innovation and R&D investment. Huawei started investing in 5G R&D in 2009. In fact, when 4G network deployment began, we were thinking about what the next generation of wireless network technology would be like, which is now called 5G.

The company has made important contributions to the global 5G standards. At the same time, we are actively innovating key technologies, such as 5G base station chips, MIMO that supports multiple wireless access technologies, and blade base station technology, which have enabled Huawei to take the lead in the field of 5G technology. These technological innovations are the result of our continued increase in R&D investment and cooperation with the industry and customers.

Huawei is a company driven by technological innovation and customer demand. I don't understand why the outside world has made up so many stories after Huawei took the lead in the 5G field. Huawei is leading because we continue to invest in technology and innovation. Huawei has made significant contributions to the telecommunications industry, and I believe that as an innovator and contributor, we should be respected.

14.Tara Deschamps, Canadian Press: If a ban is imposed on Huawei, what impact will it have on Huawei's current and future cooperation with universities in Canada? Does it mean that cooperation will be terminated or new cooperation contracts will be delayed?

Liang Hua:

Regardless of whether there is a ban or not, Huawei's local R&D investment and cooperation strategy with universities will not change. We will continue to increase R&D investment and strengthen our partnership with Canadian universities.

15. Barbara Shecter, National Post/Financial Post: You just said that you hope that the final decision on 5G will be based on technology rather than other factors. You also mentioned in today's interview that these decisions are driven by political factors. As the chairman of Huawei, are you worried that the final decision will not be based on technology, but on trade partnerships, trade agreements or other factors?

Liang Hua:

We support building a strong economy through free trade. In the short term, political factors may have some impact on the scale of our business, but in the long run, I believe that technology will ultimately drive human progress, because technological development will benefit all of humanity and society. From the history of human development, technological progress will bring about social development. From 2G, 3G, 4G to 5G, it can be said that the progress of each generation of mobile communication technology has brought convenience to human communication.

We believe that politicians and people in various countries will ultimately make wise decisions and will not prevent good technologies from being enjoyed by the public.

16. Omar Sachedina, CTV: You mentioned earlier that the current China-Canada relationship is not ideal. What efforts do you think should be made to make the relationship between the two countries ideal?

Liang Hua:

As a company, we do not have the ability to improve relations between the two countries to an ideal state.

Omar Sachedina: As a company, Huawei hopes to continue to expand its business in Canada. From this perspective, what are your expectations for China-Canada relations? How do you think the current environment can be softened?

Liang Hua:

Huawei is committed to localizing its operations in Canada. We comply with all applicable Canadian laws and regulations, while also fulfilling our social responsibilities and actively giving back to the local community.

In Canada, we will continue to focus on cooperation with operators (including terminal sales), provide more advanced and more affordable products and solutions to local consumers and customers, and help Canadian telecom operators better deploy networks. We hope to provide Canadians with smarter terminals so that they can better enjoy the benefits of digitalization and intelligence.

Canada is a free and inclusive country, so we will continue to increase our R&D investment in Canada. As a company, we sincerely hope to conduct business under the good relations between the two countries, in a free trade environment, and on the basis of fairness and justice. I believe that cooperation can lead to win-win results.

Contribute to helping humans better enjoy the benefits of digitalization and intelligence

17. Lynn Grenier, IT World Canada: We have talked a lot about telecommunications and 5G today, and I think we have almost finished asking all the questions. Huawei is a large company, and its business is definitely much more than that. In the field of terminals, Huawei currently only provides mobile phones to Canada. When does Huawei plan to bring other terminal products to Canada?

Liang Hua:

As long as Canadians like Huawei products, such as smartphones, PCs, and home terminals, and as long as they can be sold here, we are willing to provide them.

Huawei is committed to providing all-scenario smart terminal products. We are still thinking about what the terminal form will be in the future all-scenario smart life. We believe that terminals will play a key role in the future, especially when 5G provides high bandwidth, low latency, and multiple connections. We need to provide consumers with better terminals so that they can enjoy the benefits brought by the network.

This Sunday, Huawei will release a 5G foldable phone at the Mobile World Congress in Barcelona. I think it is worth looking forward to and I hope you will pay attention to it.

18.Alicja Siekierska, Yahoo Finance Canada: Back to the issue of intellectual property rights, can you explain in detail how Huawei's current policies are different from previous policies? Will the Canadian model be extended to other countries?

Liang Hua:

In Canada, Huawei shares some patents with universities. This is actually a model that was jointly explored during the cooperation with Canadian universities. There are different models for cooperation with universities in different countries. We will not adopt a single model globally, but we must cooperate on the basis of win-win, which is the most important principle for conducting research cooperation with universities. We will continue to increase investment in R&D and contribute more value. It is a common model for enterprises to conduct industrial cooperation with universities. Huawei itself has also made relatively large investments in R&D, with R&D investment of US$15 billion in 2018.

In addition to our own R&D investment, we also attach great importance to cooperation with universities. These cooperation projects focus on different fields, depending on the strengths of the university and the country where it is located. The general principle we adopt is that the cooperation model we adopt is suitable for our specific cooperation field. Huawei will continue to increase cooperation with universities, and at the same time, we will continue to increase our R&D investment to contribute to the better enjoyment of the dividends brought by digitalization and intelligence for all mankind.