Huawei

Based on Wikipedia: Huawei

The Company That Learned to Build an Empire by Copying—Then Surpassing—Its Teachers

In 1987, a former military engineer named Ren Zhengfei scraped together about five thousand dollars with five partners and founded a company in Shenzhen. Today, that company has built roughly seventy percent of Africa's cellular networks, employs nearly two hundred thousand people, and has become so strategically important that the United States government treats it as a national security threat.

The company is Huawei. And depending on whom you ask, it's either the most impressive technology success story of the twenty-first century or a Trojan horse for Chinese state surveillance.

Probably both things are true.

The Art of Reverse Engineering

To understand Huawei, you need to understand 1980s China. The country's telecommunications infrastructure was, to put it charitably, a disaster. Making a phone call between cities could be an ordeal. The government knew this had to change, but China lacked the technology to build modern telephone networks. All the sophisticated equipment—the switches that route calls, the systems that keep everything connected—came from foreign companies like Alcatel, Lucent, and Nortel.

Ren Zhengfei had spent years in the People's Liberation Army as an engineering officer. When he founded Huawei, his strategy was remarkably simple: buy foreign telephone switches, take them apart, figure out how they worked, and build Chinese versions.

This is called reverse engineering, and it's exactly what it sounds like. Instead of inventing something new, you start with a finished product and work backward to understand its design. It's how Japan rebuilt its industrial base after World War Two. It's how South Korea became a technological powerhouse. And it's how Huawei transformed from a reseller of Hong Kong electronics into the world's largest telecommunications equipment manufacturer.

The early years were scrappy. Huawei's salespeople traveled from village to village in China's poorest regions, selling to customers that the big foreign companies couldn't be bothered to serve. Small hotels. Rural telephone exchanges. Towns so remote that the major players never showed up.

This turned out to be brilliant strategy. By serving customers everyone else ignored, Huawei learned how to build reliable equipment cheaply. And once you can build something cheaply and reliably, you can start moving upmarket.

The Switch That Changed Everything

The breakthrough came in 1993 with something called the C&C08, a program-controlled telephone switch. A telephone switch is the brain of a phone network—it's what connects your call to the person you're trying to reach. When you dial a number, the switch figures out where that call needs to go and routes it there.

The C&C08 was, at the time, the most powerful switch made in China. It wasn't the most sophisticated in the world, but it didn't need to be. It was good enough, it was cheap, and Huawei's engineers would show up personally to install and maintain it.

More importantly, Huawei had learned something that would define its next three decades: the Chinese government would support domestic technology champions. In 1994, Ren Zhengfei met with Jiang Zemin, then the General Secretary of the Chinese Communist Party. Ren reportedly told Jiang that telecommunications switching equipment was a matter of national security—that a country without its own switching technology was like a country without its own military.

Jiang agreed.

What followed was a strategic partnership between Huawei and the Chinese state that persists to this day. The Wall Street Journal has estimated that Huawei received approximately forty-six billion dollars in loans and other support from the Chinese government, plus another twenty-five billion in tax cuts. This isn't unusual for Chinese technology companies—the government has a long history of picking winners and backing them with state resources—but the scale of support Huawei received was extraordinary.

Going Global

By the late 1990s, Huawei had conquered China. But China, for all its size, was still a developing market. The real money was in Europe, North America, and the wealthy nations of Asia. Getting there would require something more than cheap equipment and government backing.

The company's strategy was elegant. It started in places that looked a lot like rural China: developing countries with underdeveloped telecommunications networks and limited budgets. Sub-Saharan Africa became a particular focus. Huawei entered the African market in 1998 and has since become the most important Chinese telecommunications company operating on the continent.

Think about what this meant for African nations. Building a cellular network from scratch is phenomenally expensive. The established players—Ericsson, Nokia, the remnants of the old telecommunications giants—charged developed-world prices. Huawei offered comparable equipment at a fraction of the cost, often with financing from Chinese state banks.

By 2020, Huawei had built approximately seventy percent of Africa's 4G networks. That's not a typo. Seven out of every ten African cellular base stations were made by Huawei.

The pattern repeated across the developing world. The Middle East. Southeast Asia. Latin America. Wherever there was a government trying to modernize its telecommunications infrastructure on a budget, Huawei was there with an attractive offer.

The Other Kind of Copying

Not everything Huawei learned came from legitimate reverse engineering. The company has faced repeated accusations of intellectual property theft—essentially, that it stole technology rather than developing it independently.

The most notable case involved Cisco Systems, the American networking giant. In 2003, Cisco sued Huawei, alleging that Huawei had copied Cisco's router software and even replicated bugs in Cisco's code. Think about that for a moment: if you independently develop software, you won't have the same bugs as someone else's software. Having identical bugs is strong evidence of copying.

The case was settled out of court, with Huawei agreeing to modify its products. But the accusations didn't stop. Over the years, Huawei has been accused of stealing technology from Motorola, T-Mobile, and numerous smaller companies. A federal jury found that Huawei had misappropriated trade secrets from T-Mobile related to a phone-testing robot called Tappy.

Huawei has generally denied these allegations or characterized them as misunderstandings. But a pattern emerged: Huawei would enter a partnership with a Western company, gain access to technology and expertise, and then end up competing directly against that same partner with suspiciously similar products.

Nortel, the Canadian telecommunications giant that once dominated the industry, is perhaps the most cautionary tale. In the 1990s, Nortel outsourced production of its entire product line to Huawei, then later outsourced much of its engineering as well. By 2009, Nortel was bankrupt. Huawei, meanwhile, had become one of the world's largest telecommunications equipment manufacturers.

Correlation isn't causation. Nortel made plenty of mistakes that had nothing to do with Huawei. But the relationship illustrated a dynamic that would become increasingly fraught: Western companies sharing technology with a Chinese competitor that had the backing of a state willing to play a very long game.

The Security Question

Here's where things get complicated.

Telecommunications equipment isn't like a consumer product. When you buy a router for your home, the worst that can happen is that it stops working and you have to buy another one. But when a country builds its telecommunications infrastructure using equipment from a single vendor, that vendor gains extraordinary access to that country's communications.

The equipment could, in theory, be designed to allow eavesdropping. It could have "backdoors"—hidden access points that let someone listen in on calls or intercept data without anyone knowing. It could be programmed to fail at a critical moment, crippling a nation's communications when an adversary chooses.

For years, intelligence agencies in the United States, Australia, and other Western nations have warned that Huawei equipment poses exactly these risks. In 2012, Australian and American intelligence agencies concluded that a hack on Australia's telecommunications networks was conducted by or through Huawei. The two network operators involved disputed this conclusion, but the damage was done.

The concerns aren't purely theoretical. China's legal framework essentially requires companies to cooperate with state intelligence when asked. The 2014 Counter-Espionage Law and the 2017 National Intelligence Law give Chinese security services broad authority to compel cooperation from companies operating in China. When critics ask whether Huawei could be forced to help the Chinese government spy on foreign countries, the honest answer is: under Chinese law, yes.

Huawei's response to these concerns has been consistent: show us the evidence. The company points out that despite years of accusations, no one has publicly demonstrated a backdoor in Huawei equipment. No smoking gun has emerged. The suspicions remain suspicions.

This is true. It's also somewhat beside the point. The risk isn't just that Huawei has already built surveillance capabilities into its equipment. The risk is that it could be compelled to do so in the future. And once a country's telecommunications infrastructure is built on Huawei equipment, switching to something else is extraordinarily expensive and disruptive.

The Meng Wanzhou Affair

In December 2018, Canadian authorities arrested Meng Wanzhou at Vancouver International Airport. Meng wasn't just any Huawei executive—she was the company's chief financial officer and the daughter of founder Ren Zhengfei.

The arrest was made at the request of the United States government, which wanted Meng extradited to face charges of bank fraud and violations of sanctions against Iran. The allegations centered on Huawei's business dealings in Iran through a subsidiary, which American prosecutors claimed Meng had lied about to banks.

What followed was a three-year diplomatic crisis. China responded by arresting two Canadian citizens on espionage charges—a move widely seen as hostage diplomacy. Tensions between China and both Canada and the United States escalated dramatically. The case became a symbol of the broader conflict between China and the West over technology, trade, and geopolitical influence.

Meng was eventually released in September 2021 after reaching a deferred prosecution agreement with American authorities. The two Canadians were released by China on the same day. The timing was not coincidental.

The Ban

The Trump administration treated Huawei as a national security threat requiring aggressive countermeasures. In 2019, the US Department of Commerce added Huawei to its "Entity List," which effectively prohibited American companies from selling technology to Huawei without government approval.

This was devastating. Modern smartphones and telecommunications equipment depend on components and software from around the world. Huawei's phones ran on Google's Android operating system and used chips designed by American companies. Suddenly, Huawei couldn't legally access any of it.

The restrictions tightened over time. By 2020, even foreign companies that used American equipment or software in their manufacturing processes were prohibited from selling to Huawei. This was designed to close loopholes—to ensure that Huawei couldn't simply buy from non-American suppliers who happened to use American technology.

In November 2022, the Federal Communications Commission banned the sale or import of Huawei equipment in the United States outright, citing national security concerns.

Other countries followed. All five members of the Five Eyes intelligence alliance—the United States, United Kingdom, Canada, Australia, and New Zealand—have restricted or banned Huawei from their 5G networks. Japan and India, despite not being Five Eyes members, have done the same. Ten European Union countries have imposed restrictions.

The result has been a bifurcation of the global telecommunications market. In much of the West, Huawei is effectively locked out. In China and much of the developing world, it remains dominant. The company that once dreamed of becoming a truly global technology giant now operates in a divided world.

Survival and Adaptation

Huawei is not dead. Far from it.

Cut off from American technology, the company has invested heavily in developing alternatives. It created its own mobile operating system, called HarmonyOS, to replace Android. It has worked to build domestic Chinese supply chains for the components it can no longer buy abroad.

In 2020, facing the prospect that its smartphone business might collapse entirely under American sanctions, Huawei made a remarkable decision: it sold its Honor brand to a consortium backed by the Shenzhen city government. Honor, freed from the restrictions that applied to its former parent, could once again use American technology. Huawei, meanwhile, retained its higher-end smartphone lines and focused on survival.

As of 2025, Huawei remains the largest smartphone vendor in China, with about eighteen percent market share. It continues to dominate telecommunications equipment sales in countries that haven't banned it. It has expanded into new areas: electric vehicle autonomous driving systems, rooftop solar power products, cloud computing services.

The company has proven remarkably resilient. American sanctions hurt it badly, but they didn't destroy it. If anything, they accelerated China's efforts to develop an indigenous technology industry independent of Western suppliers.

What's in a Name?

According to Ren Zhengfei, the name Huawei comes from a slogan he saw painted on a wall: "Zhonghua youwei," meaning "China has achievements" or "China is able." The characters can also be read as "splendid achievement."

Non-Chinese speakers have struggled with the pronunciation for decades. It's properly pronounced something like "Hwa-way" in Mandarin, though the company has encouraged English speakers to say "Wah-Way." Ren has been adamant about not changing the name, reportedly saying the company would "teach foreigners how to pronounce it" rather than adopt something easier.

The name captures something essential about the company and about China's technological ambitions. This is a company that believes China can build world-class technology. That conviction has driven three decades of remarkable growth, along with the controversies and conflicts that growth has produced.

The Bigger Picture

Huawei matters because it sits at the intersection of technology and geopolitics in ways that few companies ever have.

It's a symbol of China's rise as a technological power. It's a test case for whether Western countries can maintain technological leadership in a world where China is willing to invest aggressively in strategic industries. It's a question about whether the global technology industry can remain integrated or will fracture into competing blocs.

The recent news that President Trump may permit Nvidia's advanced AI chips to be sold to China suggests the battle isn't over. Technology remains a domain of competition and, occasionally, cooperation. Huawei's story is part of that larger narrative—a story still being written, with consequences that will shape the technological landscape for decades to come.

The company that started by reverse-engineering telephone switches in Shenzhen has become something much larger: a focal point for debates about surveillance, national security, intellectual property, and the future of global technology. Whatever you think of Huawei, it's impossible to ignore.