According to a report by Chinese media NetEase, Huawei’s CEO Ren Zhengfei recently warned that Huawei should change its business thinking and policies and “take survival as the main credo” to ensure that it can weather the crisis over the next three years. Ren’s admission caused heated discussions on the Internet. So, what could we read between the lines from Ren’s confession? As an attempt to answer this question, the Vision Times had an interview with Dr. Xie Tian, a lecturer at the Aiken School of Business of the University of South Carolina, in the U.S.
Xie pointed out in the interview, “Mr. Ren Zhengfei’s statement is relatively straightforward and hits the core issue. Huawei’s situation is truly alarming. It is currently facing serious challenges that its chances of survival are in question. Of course, if Huawei were an ordinary company, with the pressures, restrictions, and sanctions of the U.S., it would have gone bankrupt.”
Xie also talked about how Huawei’s mobile phones, 5G, communications equipment, and communications technology infrastructure business have all been hit hard, especially the mobile business. Huawei’s overseas 5G facilities and networks have been banned and dismantled by many countries. So, in theory, the company should have gone under a long time ago, and it has died and come back to life more than once.
So why is Huawei still alive today? “I heard that Huawei is not a real private company, but a company controlled by the Chinese government,” said Mr. Ta.
Huawei’s cash flow cut off?
Ren also emphasized that Huawei should switch from pursuing scale to pursuing profit and cash flow. Xie said: “This shows that they really have no way to continue to afford the current scale of their business. I have heard before that Huawei will invest in pig farming. This indicates their core mobile phone business has not been doing well and has not been able to continue to expand internationally.”
Xie also mention that Huawei is having profit problems, and sales are not going well, either. Cashflow is the biggest problem for every company. Because of cash flow problems, in the past, some companies, even though they had a lot of assets, collapsed because cash flow dried up.
Ren Zhengfei hinted Huawei’s cheating?
Xie added, “Mr. Ren Zhengfei also mentioned a key point. Theoretically, as a business, you should only report the facts.” Huawei insiders have compiled many stories, including so-called union-controlled shares, all of which are lies. Huawei is a company joint-controlled by the Chinese military and government. Now Ren is telling the company not to make up stories, which is very interesting, and clearly he has also been deceived.
In general, Huawei is currently facing a huge survival crisis. On the surface, it is a private enterprise and has a certain independence. But in the end, when problems arise, the CCP will not let it collapse, but will put pressure to lay off staff, reduce spending, and streamline the structure by deleting some departments.
Xie said that whichever changes Huawei makes to strategic business directions, such as increasing investment in digital energy, it will clearly serve the needs of the Chinese Communist Party. Ren said that even if you want to give up some business areas, you still have to keep the core strategy, because the CCP supports it, or wants it to become its core.
According to Sohu, Ren previously mentioned in his internal speech that Huawei must stay focused on infrastructure development of information and communication technology, its mission. It must remain unstoppable. Xie said that this must be the mission that the CCP gave Huawei and if it doesn’t succeed then the CCP won’t need it anymore.