CNBC interview with Ren Zhengfei: The United States can never defeat us

Huawei founder Ren Zhengfei accepted an interview with the American financial media CNBC. On June 25, Huawei's Public and Government Affairs Department released the minutes of this interview on the "Voice of the Heart Community". The specific content is as follows: 

1. Reporter: Yesterday, President Trump tweeted that he had a conversation with Chinese President Xi Jinping. Now the United States has placed Huawei at the core of China-US trade. What do you think?

　　Ren Zhengfei: First, Huawei does not sell in the United States, so the trade issues between China and the United States have nothing to do with Huawei. Second, China and the United States are two very large "balls", and we are just a small sesame seed in the middle, which cannot play any role in slowing down the situation. I believe that the United States is a country ruled by law, and the issues between Huawei and the United States must be resolved through the law. We still believe in the final judgment of the court.

2. Reporter: Huawei may not have much business in the United States. As you said, Huawei does not want to be involved in the trade war. But you did say before that Huawei is caught in the middle. Do you have any expectation that Huawei will become a topic of negotiation during the G20 summit, when President Xi Jinping may meet with President Trump? Do you have such an expectation?

　　Ren Zhengfei: I think we are not that important. For two great people to talk about us as a topic of conversation over tea? I think that is not very realistic.

Reporter: But now we see that the actual situation does not seem to be the case. President Trump has spent a lot of time talking about Huawei, and many other US officials have also spent a lot of time talking about Huawei.

　　Ren Zhengfei: Because they are in good health and have a lot of energy. They should have a lot of things to worry about, but they worry about us and take the trouble to do so. I am very grateful for that. They praise us, but we don't have such a high status.

Reporter: You mentioned that Huawei may not deserve so much attention, but if you look at many American politicians, including President Trump, they do spend a lot of time talking about Huawei.

　　Ren Zhengfei: Maybe it's because they can't kill us, no matter how hard they try, and they may not die in the future. They have to keep caring about us for years. Isn't it tiring? We are communicating with the US government through various channels. Because the US is a country ruled by law, our communication in court is actually communicating with the US government. The US government presents evidence to the court, and we also present evidence to the court. Let the court judge whether we are wrong or not, and how much we are wrong, and make a ruling. This is the most important issue. As a bargaining chip, I don't think we are worth it, and we don't want to.

3. Reporter: Although Huawei is unwilling to be a bargaining chip, there is no way to change the fact that Trump said he would make Huawei a topic in the negotiations between China and the United States, and the current situation has affected Huawei's business. You said in an interview before that due to the current situation in the United States targeting Huawei, Huawei's revenue will be reduced by 30 billion US dollars.

　　Ren Zhengfei: 30 billion US dollars is a small matter for us. Our revenue this year will exceed 100 billion US dollars. This has not changed our basic situation. We mainly cut some marginal products, so the US sanctions will not have a big impact on us.

Reporter: But I think many people would say that $30 billion should have a significant impact. After all, it accounts for about one-third of Huawei’s revenue last year, and it should also have an impact on Huawei’s employees and shareholders, isn’t that right?

　　Ren Zhengfei: No. Because our plan for this year is about 135 billion US dollars, which will affect about 30 billion US dollars of revenue, and we still have about 100 billion US dollars. At present, our sales revenue is still growing, and it has increased by more than 20% by the end of May. We predict that it may decline in the future, but there is no downward trend yet. As of yesterday's financial report, it has not declined and is still rising. Therefore, we are not sure what the situation will be at the end of the year. However, I think a decline of 30 billion US dollars is a small matter for us. We can bear it because we are not a listed company and we don't pay much attention to this issue. We focus on the real quality of our operations.

4. Reporter: Since you just mentioned the quality of business growth, let us ask a question. We have also seen that among Huawei's entire business, smartphones in the consumer business are the fastest growing; you also mentioned in a previous interview that smartphone shipments have now fallen by 40%. If the relationship between China and the United States has hit Huawei's fastest growing business, how can Huawei's entire large business continue to grow?

　　Ren Zhengfei: The terminal business in the Chinese market has not declined. It is just that the overseas market has dropped by 40% at its peak, but it is recovering now. The overseas market has dropped by less than 20% and is recovering rapidly. Therefore, overall, the decline in the terminal business will not be that big throughout the year.

　　The company's business may decline from the originally planned 2019 revenue of $135 billion to around $100 billion, which is the same as 2018. But on the other hand, profits have increased. The company's current profit growth rate is faster than we expected. I think the rapid increase in profits means that we should increase our investment in strategy. Therefore, this financial report was completed in a few minutes because it was much better than I expected. So why bother reporting?

5. Reporter: You also mentioned that profit is not the most important thing. However, we know that many Huawei employees are also shareholders of Huawei. They should enjoy Huawei's dividends, which come from Huawei's profits. What do you think Huawei employees think now? Have you communicated with them?

　　Ren Zhengfei: Huawei employees are more motivated and work harder. We must win. We have the ability to win this battle against sanctions. Therefore, everyone is full of confidence. If you have the opportunity, you can have a discussion with our employees.

Reporter: Do you mean that Huawei's employees don't care about the decline in Huawei's profits and the resulting decline in their salary income?

　　Ren: First of all, salaries will not decline. We have sufficient salary payment capacity. We are also changing the incentive structure. Many people who perform well at critical moments are promoted and given salary increases. Long-term benefits depend on the year-end financial statements, which may be slightly lower than the plan at the beginning of the year. But seeing that it is much higher than my psychological expectations and the profit situation is still very good, I feel at ease. I will not let the finance department report to me anymore. I will focus on the development of some technical aspects.