Inside China Tech: Huawei CEO raises stakes on tech development amid coronavirus

Hello, This is Bien Perez from the SCMP’s technology desk, with a wrap of our leading stories from last week. Huawei Technologies is stepping up investments in research and development this year, despite challenges from the coronavirus pandemic and US government sanctions. The world’s largest telecommunications equipment supplier and China’s biggest smartphone maker expects to raise that investment to US$20 billion, up from US$15 billion last year, according to Ren Zhengfei, the company’s founder and chief executive. “Over 200,000 scientists, experts and engineers worked overtime during the Lunar New Year holiday because we’re racing to develop new [technologies],” Ren, 75, said in an interview with the SCMP this week. Without elaborating, he referred to the work in progress as “something which will keep us ahead of the global competition”. Shenzhen-based Huawei was already on the front foot before the coronavirus outbreak gripped China and spread around the world because of pressure from Washington on its 5G network equipment business. “The US will continue to increase sanctions on us, and we will have to complete [the new technologies] before than happens,” Ren said. The Trump administration added Huawei to the US trade blacklist in May last year, restricting the company’s ability to buy hardware, software and services from American hi-tech suppliers. While Washington has since granted five licence extensions to Huawei that allowed it to temporarily access American suppliers, US President Donald Trump earlier this month signed legislation to bar the country’s telecoms carriers from using government subsidies to buy network gear from the Chinese company. The US has also continued to urge its allies in Europe to ditch Huawei equipment in their roll-out of 5G mobile networks. “It’s not a problem for us to survive as a company, but it’s questionable whether we can keep our leading position,” Ren said. “We won’t be able to lead the world in the next three to five years if we cannot develop our own technology.” Still, Ren said neither the US sanctions nor the pandemic has had a major impact on Huawei’s operations: “We believe the impact is minimal, and we can pull through it.” Huawei has resumed more than 90 per cent of its production and development operations, he said. The company has also kept its supply chain mostly intact by helping provide its partners with protective gear for workers to keep production going. Coronavirus lockdown shows digital future of life, work in China China turned to hi-tech tools in a big way to provide the nation with a sense of normalcy in the face of the coronavirus outbreak. That approach is predicted to become the norm across the country, as businesses reopen after being shut down during the height of the crisis. “The outbreak has exposed the vulnerability of some offline businesses,” said Frank Yang, a senior analyst at research firm Analysys. “There will definitely be a need for new online, digital development.” While online working and learning are nothing new in China, wider acceptance of these tools could expedite the digitisation of businesses and whole industries – a major part of Beijing’s hi-tech ambition to establish a powerful digital infrastructure for the world’s second largest economy. A glimpse of that next stage in China’s development emerged after the country’s technology sector literally served as a lifesaver, as it rushed to the fore on many fronts: robots in hospitals, heath code apps, online education and remote working. Some of the most popular business apps in February, for example, included Alibaba’s Dingtalk, Tencent’s WeChat Work and Tencent Meetings, Huawei’s Welink, ByteDance’s Lark and Pinduoduo’s Knock. Alibaba is the SCMP’s parent company. “Protracted disruption amid the pandemic will force most firms to make up their minds and go digital,” said Zhang Xinhong, a research director at government think tank the State Information Centre of China, in a recent webinar. He said remote working, e-commerce, online education and other digital services “will now become new options for more companies”. Chinese smartphone giants pause manufacturing in India China’s major Android smartphone vendors, including Xiaomi, Oppo and Vivo, have suspended manufacturing operations in India, following a 21-day nationwide lockdown ordered by Prime Minister Narendra Modi on Tuesday to stop the coronavirus from spreading. That directive is expected to result in a decline this year in India’s smartphone market, the world’s second largest after China, as manufacturers comply with the order and domestic consumption slows down during that period, according to analysts. Apple’s main iPhone assemblers, Foxconn and Wistron, as well as South Korea’s Samsung and LG have also temporarily halted work at their plants in India in line with the directive. “In the worst-case scenario, the Indian smartphone market could see a 4.2 per cent decline in 2020,” said Nicole Peng, vice-president of mobility advisory services at Canalys. Smartphone shipments in India grew 8 per cent to 148 million units last year, Canalys data showed. The projected slowdown may prove to be a bigger a concern for China’s major Android smartphone companies, which sell the most popular models in India. Canalys’ Peng, however, indicated that the pause in manufacturing may have been expected by these companies based on their experience in China, where many factories were shut down at the height of the outbreak. And that’s all for this week. Until next time. Purchase the China AI Report 2020 brought to you by SCMP Research and enjoy a 20% discount (original price US$400). This 60-page all new intelligence report gives you first-hand insights and analysis into the latest industry developments and intelligence about China AI. Get exclusive access to our webinars for continuous learning, and interact with China AI executives in live Q&A. Offer valid until 31 March 2020.

Inside China Tech: Huawei CEO raises stakes on tech development amid coronavirus

China has turned to hi-tech tools in a big way to provide the nation with a sense of normalcy in the face of the coronavirus outbreak