It's My Way or the Huawei

to the Chinese telecom company Huawei. That company has only been around since nineteen eight seven slash so a little more than thirty years, and yet it's now a dominant company in the telecom industry that brings in more than ninety billion dollars in revenue. In today's episode, I want to explore the history of Huawei ties to the Chinese government, the incredible rise to prominence on the world stage, and

the reasons why the company is encountering resistance today. Now, before I jump into the whole backstory, I want to address a real issue about covering these types of topics. Researching topics is always a challenge because you have to take into consideration your sources. Some sources may be unreliable, either because they are poorly constructed, or they may be part of a propaganda or a misinformation campaign specifically designed

to project a particular story. You can think of it as a quote unquote version of the truth, and truth would be an extra quotation marks. In this episode, I attempted to corroborate as much information as I could with several sources, but much of the information coming out of China has been let's say, vetted heavily, and so getting to what is really going on remains a challenge. It's possible that the story that's being presented is in fact a reflection of what is really happening, but it's also

possible that it's not. Also, I'll be talking a lot about the Communist Party of China in this episode, and I want to make it clear that the Communist Party is essentially synonymous with the Chinese government, and it's communist with a capital C, as opposed to someone who believes in the philosophy of communism, which would be a lower

case see communist. When I say communist in this episode, I'm talking about the political power in China, not the philosophy that the political party takes its name from the two are different, largely different in fact. Okay, now let's get on with the show. A lot of Huawei's history hinges on the massive changes in China that began in

earnest in. If you want to learn more about China's path to entering the modern age, listen to the episode that came out just before this episode, because those changes are what made it possible for a company like Huawei to exist in the first place. The story of Huawei begins with the story of its founder, Ren Shan Fai. Wren was born in nineteen forty four in Unshun, a

city in the province of Gishao, China. I apologized, by the way for butchering the pronunciation of all these names, And I have to admit, I really am quite ignorant about much of China, So all of what I'm about to relay to you was brand new to me when I started researching this episode. I don't want to even remotely make it seem like I feel I'm an expert on this subject matter. So Gishao is an interior province

of China. It's far from the coastal cities that marked China's centers of trade, and it's a more rural province in China, though that has been changing over the past several years. When the economic reform arms of nineteen seventy eight began to take effect in China, Gao would largely be left behind, becoming the poorest province for nearly two decades now. Wren's parents worked at a school in ann His father also had worked for a weapons factory as

sort of a clerk. The order in which that actually happened is one I'm not entirely sure about, because there's some conflicting information, conflicting stories in various sources. There's even one version of this story I've seen that said definitively that Wren was born in October nineteen forty four and that his parents first met in nineteen forty nine, which

I considered to be something of a puzzler. Now this comes as a little surprise to me, because I mean, after all, getting information out of China is a is a bit of a crap shoot on the best of days, So really, I guess you should expect it. One thing that definitively but in nineteen forty nine is that was the year the Communist Party gained control of China, and it has held onto China's government ever since. I mean the two are essentially synonymous. Bren attended school, enrolling in

university in nineteen sixty. After he left school, at least according to some sources, he worked in civil engineering for a while, but in the nineteen seventies. Frequently it's cited as nineteen seventy four he joined the People's Liberation Army or p l A. That's China's official armed forces, and

it's overseen by the Communist Party of China. This is an important part of our story, not just because it's certainly had an impact on the life of the founder of Huawei, but also because the p l A effectively belongs to the Communist Party as much as it does to China. In fact, you could argue that the p l A is really the Communist Party's military, as one of its founding principles is to ensure the Communist Party

of China maintains its power in government. Rents specifically worked within the p l A at a research institute as a technologist. When he joined, China was going through Mount z Thong's Cultural Revolution, and if you listen to the episode before this one, you'll learn more about the Cultural Revolution. Much of China was tumultuous and chaotic during those years. Large areas of China faced enormous challenges, with people struggling

to make their basic needs met just to survive. So Ren's department his his unit was sent to the northeast region of China, in an area that was quite different from Ren's home province, and conditions there were frigid and they were harsh. And Rin's department was tasked with building a factory that would produce synthetic fibers, which would then be woven together to create new clothing for Chinese citizens. According to Wren, he talked about this period of his

life in a press conference in early twenty nineteen. During this time, each Chinese citizen had a government mandated allotment of one third of a meter of cloth, and Wren said in that interview that this small amount of cloth meant you really only had enough material to patch holes in older clothing. So this factory that he was working on was part of an effort to counteract the scarcity of cloth made from natural fibers by augmenting it with

synthetic fiber. Clothing now the factory would not be dependent upon Chinese technology. Frankly, Chinese technology wasn't up to the task, so China imported equipment from France, which supplied a system that relied heavily on automated controls. The Chinese team learned how these components worked, how to maintain them, and then even how to reverse engineer them to an extent, so you could take this base strategy and apply it across

China across all industries. That's essentially how China was able to start to catch up to the rest of the world, importing technology and then reverse engineering it. So that was pretty much part and parcel the way China got caught up on lots of technologies throughout the seventies, eighties, and nineties, and then after that they could start designing their own

technology and innovating upon it. Now, Wren would go on to become part of the p l a's Engineering Corps and later still as a member of the Communist Party,

but this was not a smooth path for him. His father had been labeled a capitalist during the Cultural Revolution, and that accusation meant that Wren's family would all be disqualified entry into the Communist Party, and that would end up being a big hurdle because at the time, being a member of the Communist Party was pretty much a prerequisite if you wanted to reach any sort of status

within your career. You couldn't advance in your position if you weren't a member of the Communist Party, even if you were clearly talented and had a lot of aptitude. Bren would work in the Engineering Corps, eventually inventing a tool that could be used to help test factory equipment at that synthetic fiber factory. That achievement earned him the honor of being able to attend China's National Science Conference,

which was held by the Communist Party of China. His work gained him support of party members and his Engineering Corps supervisor, and they essentially sponsored him and helped him secure membership within the Communist Party in ninety eight, just as those economic reforms were starting to take place. Now, this was two years after the death of Chairman Mao, and it was when China was just beginning to reverse decades of practices that had in many ways held back

the country. One of the big ones was an attitude of suspicion towards intellectualism and education during the Cultural Revolution, Mao saw to it the intellectuals and students whom he viewed as potential threats to his position were sent off to do manual labor in many of the interior sections

of the nation by night. The Chinese authorities decided that this had done an incredible disservice to the country, and so now people like Wren were being looked at as potential leaders to bring China up to speed with developed nations. Bren would rise to the rank of deputy director of a research institute within the p l A. He oversaw work that mainly focused on construction, which makes sense after

his experiences in helping establish that synthetic fiber factory. But in nineteen eighty three, the Chinese government disbanded the engineering core of the p l A and Wren was left without a position, so he retired from the army, and then he went on to work at the Shenjin South Sea Oil Corporation. Shenjin is in southeast China Hong Kong, which at the time was under the control of the

United Kingdom borders Snjin. The Shenjen South Sea Oil Corporation is a state owned entity, meaning the oil boat company belongs to the government of China that therefore the Communist Party of China. Ren worked there for a few years, but reportedly found the job unsatisfying, and he left in nineteen seven with a new goal to create a company

of his own. And there are a lot of different reports about Ren founding Huawei along with maybe four partners, with the equivalent of somewhere between three thousand dollars and five thousand dollars American. That's a pretty amazing story, considering that today it's number nineties seven on Forbes's Most Valuable Companies list and an estimated brand value of eight billion dollars.

Getting a handle in the company's value is actually really hard, because well, to call its financial reporting opaque is going beyond being generous. However, a piece in the Far Eastern Economic Review, which took a detailed look at Huawei's financial operations and complicated ownership status, tells a very different story.

In that version, Wren and fourteen colleagues took out a loan from a state operated bank for the princely sum of eight and a half million US dollars the equivalent of that anyway, it was with this slightly less modest nest egg that he founded the company Huawei. Now I have no clue which version of this story is closest to the truth. It may be that both are true, and that the initial founding of the company was for three to five thousand dollars and then startup costs were

covered by a substantial loan. I don't know, but there are conflicts. Now, the original business of Huawei wasn't in manufacturing or design. The company started off as a reseller. It would import telecom equipment from other countries and also from Hong Kong, stuff like telephone network switches, so the basic components you would use to build out a telecommunications network infrastructure. Then it would sell that equipment to clients

within China. So obviously this wasn't like average people in China. This was for organizations, companies, the government. So one of its earliest and largest clients was Ren's old employer, the

People's Liberation Army. Now, while reselling imported equipment was the source of revenue, Huawei also would create a team of engineers whose job it was to learn everything about the equipment they were bringing in and then to reverse engineer it with the ultimate goal being to produce similar tech independently. In fact, Huawei had an imbalance between researchers and production.

Typically you would have way more people in production and then a smaller number as engineers who are working in R and D. Huawei through that on its side, where you had about twice as many people who are working in R and D essentially trying to reverse engineer this technology. Then you have people actually producing the stuff, and thus

began Huawei's journey towards becoming a major telecommunications company. Now, when we come back, I'll go into a bit more detail about what we know or think we know of the way the company operates. But first let's take a quick break. The fact that v p l A partnered with Huawei to build out a telecommunications infrastructure for the military is a big reason for the success of the company.

In nine six, Huawei's reputation set it up for enormous success as the Chinese government decreed that it would support domestic telecommunications companies and prevent foreign companies from coming into China to build out communications and internet infrastructure. So, whether you view Huawei as truly independent or not, an in case you're curious. I think any company in China is at least partly subject to the whims of the Chinese government,

if not under the direct control of the Chinese government. Anyway, the company owes much of its success to state backed support. The Chinese government suppressed competition from foreign companies, and Huawei got a nice, big boost both from the government and the p l A. Now, why Huawei got such preferential treatment is one of many unanswered questions about the company, because it's not the only telecommunications company in China. There

are others as well. So why did Huawei get a bigger boost than some of its fellow domestic telecom companies. It's possible that the military and Communist party connections were largely responsible for that. Huawei often ended up being the site of many visits from high ranking members of the Communist Party of China, and so there's a lot of guests is that it was this political connection that gave

Huawei the advantage. Shen Jin named Huawei one of its twenty six key development projects that have been selected for state support, and state backed banks began to extend credit to parties that were buying Huawei's products. So if you were trying to build out an infrastructure, you were essentially getting a sort of discount almost if you went with

Huawei over anyone else. At this point, we're still really just talking about companies and governments, because again, Huawei's focusing on networking technologies, not in consumer electronics, although the company would start to do that later on. Huawei also received large loans from the government in order to develop Chinese operated GSM mobile phone infrastructure and technology, again to avoid

becoming dependent upon foreign companies. Huawei delivered upon that promise and as a result, received even greater support from state backed banks. For example, in nineteen, the China Construction Bank extended three point nine billion ranmimbi. That's the official currency

of the People's Republic of China. Okay, but how much is that in a different currency like US dollars three point nine billion, Well, in the one, which is the unit of currency for China, had an average exchange rate of eight point to seven nine one to the US dollar. So using that figure, we can estimate that this line of credit was equivalent to about four hundred seventy one

million dollars in nineteen in US dollars. But then we also should factor an inflation, right, because I mean we've had inflation since nine So today that line of credit would be worth about seven hundred forty one million dollars. That's a lot of smack arooos. It represented nearly half of all the credit this bank would exp end that year, and it all went to one company. This is one of the reasons why Huawei was able to grow so rapidly.

Had this enormous support of the Chinese government and financial sector behind it. Coupled with the Chinese government's efforts to suppress any sort of foreign competition, Huawei had no shortage of domestic customers. You had railways, telecommunications companies, you had

the military, all having high demand for Huawei's equipment. On top of that, the company began to enter into the international market, and for a ton of reasons, Huawei's equipment was much cheaper than most other products that were on the market. Again, we're talking about big infrastructure, network switches,

telecommunications components, that sort of thing. So companies from other countries began to order lots of equipment at essentially a big discount compared to Huawei's competitors, and that brought a welcome dose of foreign revenue into China, and all the while the international community expressed surprise to see this kind of technology emerge out of China in the first place. A lot of people just didn't expect to see China

produce this kind of stuff. And what they didn't really know or appreciate was that Huawei was pouring a ton of money that it had secured in loans or made in revenue back into research and development. I'm talking on the order of billions of dollars to put all of this onto a fast track, and it was occasionally lifting designs from other companies and countries wherever it could uh, sometimes to the point that would get it into trouble. Now there's a lot we don't know about Huawei. Some

of that is around the technology they produce. We don't necessarily know everything about it, and that raises a lot of concerns. Some of it is in how much influence the Chinese government has within the company that raises other concerns, and some of it just has to do with how the company itself is structured. So I'm going to go through a little bit of what's been publicly report. Did Huawei is, according to the company, privately held and owned

by the company's employees. It is not state owned, so the government of China does not own and operate Huawei. But it's also not publicly traded, and because no shares of Huawei are on open markets, there are no requirements for the company to share its financial reports, so there's no auditing of Huawei's operations, and so much about what is actually going on remains a bit of a mystery. Now. According to Huawei, employees own virtual shares in the company.

The idea is that if you work for Huawei, and if you are a Chinese citizen, then you can have some equity in the company and share in some of those profits. So by own, I don't mean they can actually buy and sell shares. They earn an equity stake in the company and they receive payouts based on company and individual performance. Essentially, if you do a great job at Huawei, you get awarded more shares, each of which pays out a certain amount of money at a regular

interval based on profits in the company. It's meant to be an incentive to attract top talent and to keep it at Huawei, but there are some big qualifiers that go along with this. One of those is that you have to be Chinese to receive any shares in the company at all. This is due to the laws of China. No overseas employees of Huawei would be allowed to own or be awarded shares in Huawei. Another is that you can't sell those shares they you don't actually have something

you can sell at a market to someone else. That shares themselves don't have a value the way a publicly traded share would, so it sounds to me like they more represent how much an employee will receive in what amounts to bonus pay. If you were to leave the employment of Huawei, the company would pay you the value of those shares, whatever that value happened to be at the time that you ended your employment with the company.

But again, there's no way to actually know how many shares there are or what the individual value of a share is at any given times, so I don't know that you would even realize if you had been given a fair deal or not. Shares then revert back to the company, which could then award them to a different employee. UM, I honestly don't know how legit this whole share thing is. Now.

According to Huawei ren himself, the founder, owns only one point four percent of those shares, though other sources suggest that he might actually own as much as five percent. Now. To be fair, some of those reports are older reports, and things could have changed between then and now, So maybe he used to own five percent but now only

owns one point four percent. I'm not entirely certain. The rest of the ownership of the company is said to be split between the thousands of employees at Huawei now. Back in an article in I t Who's stated that according to Huawei, out of the nine thousand employees working for the company, around sixty one thousand, four hundred and

fifty seven of them had shares in the company. Today, about twice as many people work for Huawei, So the company has around a hundred eighty thousand employees according to a two thousand seventeen report, and again, not all of those employees are eligible to hold shares. But again there's no external auditing of Huawei to tell anyone whether or not this is what is actually happening. One thing that has been reported is that the company maintains an active

branch of the Communist Party within the company itself. This isn't unusual for private companies in China or companies in general in China. In fact, if a company employees at least three party members, then by Communist Party rules, there should be a committee formed within that company. Ten Cent, another major tech company in China, has its own mean

this party committee. So does Ali Baba, and so this continues to blur the lines between how much of Huawei's operations are really that of a privately held company versus a state run enterprise. There are a lot of unanswered questions about how much influence does the Communist Party have over the operations of these companies. And by the way, the Communist Party involvement doesn't just include companies that originate inside China. Plenty of foreign companies that operate within the

borders of China also have their own party committees. These include companies like Walmart, which blows my mind because famously Walmart opposes unionization in the United States, which is a kind of a central theme in communism. But they have party committees in Chinese operations because that's required if they're going to operate within China. In fact, Walt Disney's interests

in China have Communist Party committees. Part of the cost of doing business in China is dealing with the Communist Party, and because business in China means billions of dollars, a lot of companies are willing to make that trade, even when it can get pretty sticky in some cases. Now moreover, Huawei itself is actually a subsidiary. The parent company is called shen Xin Huawei Investment and Holding Company, which oversees

the Huawei shareholding arrangement. And according to Huawei, employees own Huawei Holding with no other outside parties, including the government. No one else holds shares except for employees. But this means that Huawei employees own both Huawei and the holding company that quote unquote owns Huawei. See I told you it was confusing. No matter who owns what, the executives of Huawei control the whole thing, and the Communist Party

certainly has an interest in it. The corporate culture in Huawei is similar to what you'll find in other businesses in China. There's an emphasis on hard work. Employees frequently work long hours, and not too long ago, the company was known for having what was called a mattress culture. Essentially that means you worked there until you were so exhausted you would go and pass out on a mattress

inside the office. Like the office actually had rooms with mattresses in them, and instead of going home, you would just go collapse and fall asleep. The extremes went even further, with one twenty five year old employee passing away in two thousand six after contracting viral encephalitis, and it was likely complicated by his habit of working long hours and staying at the office overnight. There were also several cases of employees committing suicide, and the implication was that exhaustion

and stress contributed to that problem. The company would end up creating policies limiting overtime and would hire a person to serve as the chief health and safety officer in response to these issues. Huawei doesn't have a traditional executive structure either. They're actually three executives who take turns serving as CEO. They rotate out every six months. According to the company, That about sums of the internal operations that I can really report on with any level of confidence.

Next we'll talk about why Huawei has fallen under suspicion in the Western world. But first let's take another quick break. Now, before I dive into the incidents and accidents, hints and allegations, let's establish some context. China, along with Russia and North Korea, has been one of the major powers suspected of engaging

in cyber attacks, hacking, and espionage around the world. Now I should add the United States as way up there too, But because I live in the United States, that version of the story get talked about very much around me. But trust me, the US is definitely engaged in cyber shenanigans at certain levels. Anyway, Huawei already has a somewhat suspicious history even before we get to these questions about espionage.

In the early two thousands, US technology company Cisco sued Huawei after discovering that some of the lines of code in Huawei routers originated from Cisco. They were identical to Cisco's proprietary code. So essentially this was a case of stolen intellectual property and trade secrets. Huawei essentially copped up to it, but with the qualification that the code came from a third party partner and anyway, that the code was really open on the Internet and the company really

did nothing wrong. This prompted Mark Chandler the chief legal officer of Cisco, to respond in a blog post to dispute Huawei's explanation as being a misstatement of the facts. Rather than present Cisco's own argument, Chandler included an independent investigator's findings on the matter. This was something that was

actually submitted in court. Chandler highlighted several of those findings and pointed out that not only did it show Huawei had copied code literally in some cases, copying and pasting it white spaces and all, but that it went beyond the sections of code that Huawei had said it had removed from its products following these accusations. So, in other words, there were parts of the Huawei said, oh no, we were moved that we we found it. That was our bad.

We took it out. It's fine. But there were other parts that Huawei never even acknowledged in its initial response. The short version of this long story is that Huawei was caught illegally copying the work of another company and then tried to brush it off. It was an event

that cast Huawei's ethics, or lack thereof, into the limelight. Now, because China's government maintains a deep, if not explicit relationship with all industries within the count tree, and because that government is controlled by the Communist Party of China, and because that controlling party prioritizes remaining in power as the most important component of overseeing the country, there's a lot

of concern about Chinese businesses. In general. Companies are eager to take advantage of the low cost of producing stuff in China. If you listen to my last episode, you heard me talk about that. It's a huge boost to the bottom line for foreign companies. You can make the stuff for cheap and then sell it off at a high price. But when it comes to buying technology that's coming out of China itself, not being assembled in China, but actually designed and manufactured in China, other concerns begin

to pop up. Now, that's not necessarily the fault of companies operating within China. Those companies might have every intention of remaining as neutral as possible in order to do business. It's a smart business move. It means that nobody is going to accuse you of doing anything wrong in that level,

and it's the best way to stay in business. But that not necessarily possible with China's government or at least, it's impossible for everyone to just accept a company's assurances that it's not acting on behalf of a state backed entity and face value. There's a perception that the possibility exists for China's government to leverage a Chinese company in an effort to gain information about other nations, and if the perception is there, sadly, it doesn't really matter if

such a possibility really exists. The perception matters more than reality does. It's kind of like when we talked about the possibility of hacking a voting machine. If people show that it's possible to hack a voting machine, that undermines the public's confidence that such machines work, and it inserts doubt. It inserts doubt that undermines the confidence we have in election results, and that means it undermines democracy as a whole.

You don't even have to have a documented case of actual election interference for this to negatively impact the demo credit process. Well, the same thing is true for the case of Chinese companies and fears of espionage. Many countries have responded to this concern by limiting Huawei's involvement in

those countries. In two thousand and twelve, the United States House Intelligence Committee recommended that American businesses avoid buying equipment from Huawei and other Chinese telecommunications companies specifically because of concerns over espionage. And the message has been pretty consistent ever since. Now you might ask, is this fear justifiable?

I mean, yes, we know that many of these companies have Communist committees in them, and we know that the Communist Party in China is chiefly concerned with maintaining its power in that country. And surely the Communist Party is aware of the potential threat that powerful private companies could be to the power structure in China. But that might not be quite enough to justify the views we have

about companies like Huawei. So let's get to a measure in twenties seventeen that really spelled it out and made the threat apparent. On June two thousand seventeen, the Communist Party of China passed a national intelligence law that has caused for concern for many parties out there. Several articles in the law state that intelligence agencies may ask quote relevant institutions end quote to quote provide necessary support, assistance,

and cooperation end quote in those intelligence agencies efforts. So, in other words, China's government passed laws that lay out how government agencies can lean on companies to help collect

and provide intelligence to various government agencies. Since Huawei is a communications company that has raised some serious concerns around the world, why would you want a company to come in and lay out communications infrastructure if you know the government that oversees that company maybe leaning on it to spy on people. Now, Ren the founder of Huawei, has

stated that Huawei would never engage in such behaviors. He said that if the company were to do that, it would betray their customers and it would hurt their business. And that's true. But then people will also say, well, yeah, but that's exactly what a spy would say. Denying the company would ever collaborate with the Chinese government to collect information paradoxically confirms the possibility in the minds of many. And besides, Huawei might not even have a choice in

the matter should it come down to that. The company continues to benefit from policies in China, and there's a lot of speculation over how much leverage the government holds over Huawei. Now, there are a lot of complicating factors that make this a less than black and white matter.

For example, you could argue and persuasively. I might add that efforts to keep Huawei out of countries like the United States might be largely dependent upon keeping them out of competition as domest stick companies or other foreign companies from different parts of the world race to roll out new infrastructures, namely for technologies like five G. Huawei is a huge player in the five G space, holding more patents on five G related technologies than any other company.

So I imagine there are a lot of telecommunications companies out there who would love to see Huawei struck from the playing field. They'd say, well, now we don't have to compete against them, We can end up competing against each other and have a better chance of getting way more money because there are billions of dollars to be

made rolling out this sort of infrastructure. And you could argue, yeah, that's that's dirty pool, that's not that's not playing fair, you know, working to get a politician to to ban an entire company from being able to operate in an area. But then again, this is a very similar strategy to how Huawei got so large and successful in the first place back in China, because China had effectively done to all telecommunications companies outside of its country what other countries

are now doing to Huawei. This doesn't necessarily make it right, mind you, but there's a bit of a well you reap what you sow going on here. Moreover, the fears about espionage seemed to have more than a little weight to them due to real world incidents that have happened over the last couple of years. In a French newspaper, La Monde Afrique reported that the computer system in the

African Union headquarters in Addis Ababa had been compromised. The reports stated that every night, between midnight and two am, this system was sending data clandestinely to servers in Shanghai, China, and that this has been going on for five years straight. The facility itself had opened in two thousand twelve. Now here's the thing. The facility and its computer system had

essentially been designed and built exclusively by Chinese companies. Africa and China have worked very closely together for rolling out stuff like infrastructure, and so the implication year was that those systems had purposeful backdoors built into them from the beginning. In order to give Chinese intelligence agencies access to this data.

On those systems, there was just an ongoing data collection system for the Chinese intelligence community, and yes, Huawei had supplied much of the communications technology for that facility, though Huawei would deny that any of its equipment had anything to do with data transfers. On the other hand, it's pretty hard to imagine a scenario in which Huawei, which provided ongoing maintenance and support to this facility, would somehow remain ignorant that this was going on through the whole time.

On December first, two thousand eighteen, Canadian officials detained Huawei's chief financial officer Ming Wang Shao. Ming, by the way, is also Huawei founder Ren's eldest daughter. The officials stopped Ming as she was transferring flights in Vancouver. The reason was that the United States had accused Ming of breaking

sanctions against Iran. Indictments followed accusing Ming of using falsified information to hide business transactions with Iran, and a second indictment was against the company itself, accusing it of attempting to steal trade secrets from T Mobile and for obstructing justice. The trade secrets case itself is more than a little bit bizarre. It centers around a robotic arm nicknamed Tappy, which can tap a mobile screen rapidly. The ideas that

it can mimic how humans can tap on screens. The whole point is that it's used to test uh technology like smartphones, test responsiveness, make sure that it's registering touches, that sort of thing. Huahwei wanted to buy this technology from T Mobile, but T Mobile decided not to do that. Then a Huawei US employee was discovered with a Tappy arm hidden in his bag as he was leaving a T Mobile facility, and the Huawei play claims that the robotic arm must have just, you know, just somehow fallen

into the bag. That's weird. Huawei, for its part, stated that this employee was acting on his own, essentially taking a leap of faith that he would be rewarded if he could just get that robot arm back to Huawei. And they said, well, we certainly didn't tell him to do that. We would never do such a thing, and if he had brought it back to us, we certainly

would have just returned it. I mean, that's just wrong. However, there have been some reports of an email trail that suggests perhaps company executives back in China were all too aware of the attempted robo heist. I guess they could say that they disarmed a robot. As of this recording, Meng Wren's daughter, the CFO of Huawei, is still being held in Canada, or at least really I should say,

she isn't being allowed to leave Canada. She did post a ten million dollar bail back in December of in the eighteen and she has an extradition hearing scheduled for January twenty which could see her then go to the United States for trial, but that is still an ongoing, developing situation as of the recording of this podcast. In the US, the government has banned the sale of any Huawei phones, as well as phones from another Chinese company

called z t E, on military basis. Google has canceled its Android license with Huawei, although there's been some ongoing issues between Google and Huawei. Telecommunications companies in various countries have started to replace Huawei components with technology from non Chinese companies. Several have pledged not to use Huawei tech while building out five G networks, though that isn't across

the board for everybody. The UK, for example, has agreed to allow Huawei to build at least some parts of the five G infrastructure, though not necessarily the whole thing. A Huawei employee in Poland was arrested and accused of spying, and the company's subsequently fired the employee. Vota Phone reported that it had found hidden back doors in Huawei equipment, although some people argue it's possible these were just overlooked

vulnerabilities and not intentionally left there. Either way, the tech was deemed to be, you know, not cool to use because it's it represents a security vulnerability. President Donald Trump signed a National Security order effectively banning Huawei products in the US, and then over the following months, that ban has been waffling all over the place. It goes from extremes,

from absolutely no working with Huahwei too. Okay, you can do some business with Hahwei, but you've gotta get approval first, to all sorts of stuff in between. It's been a big mess and it's still ongoing. Wren has objected to many of these developments, which I guess is understandable. I mean,

his eldest daughter is not allowed to leave Canada. In February of twenty nineteen, he lamented that the US treats five G technology like military tech, which personally I find a mute sing because Wren comes from a military background and he's famous for quoting military sayings and applying them

to business, so I guess he should know. Anyway. I hope that this episode kind of got a little more perspective on what's going on with Huawei and why there has been such a kerfuffle around the company, and also just to understand how the heck it managed to get so big so fast. Turns out, if you have lots of money coming in from your country and you have guaranteed protection against competition and no one is there to stop you, if you steal other people's ideas, you can

get pretty big, pretty fast. So what is the future for Huawei. Well, Ren's pretty confident that it's going to do just fine, even with the US putting in a band that it's not going to affect Huawei negatively. Moreover, it'll affect the United States negatively. The u US, in turn is saying, you know what, ways important and sure they're going to be companies that have to license patents from Huawei in order to get stuff done. But it's

not the only player in town. There are other telecommunications companies that are very important in the rollout for five G, so it's not going to be as big a deal as the country and the company are suggesting. The truth is probably somewhere in the middle. But that wraps up this episode of tech Stuff. If you guys have suggestions for future episodes, whether it's a technology, a company, maybe

it's just a concept in tech, let me know. You can send me an email the addresses tech Stuff at how stuff works dot com, or you can pop on over to our website that's tech stuff podcast dot com. You're gonna find links to where we are in social media. You can reach out on Facebook or Twitter. I love seeing people you know mentioned me on there. It's pretty awesome usually, and you can also follow a link to our online store, where every purchase you make goes to

help the show. We greatly appreciate it. Don't forget. We have an archive of every single episode ever published on tech Stuff over on that website. So if you've missed an episode, let's say that you know you went to sleep in two thousand and fourteen and didn't wake up till the middle of two thousand and sixteen. Don't worry, all those episodes are still waiting for you to listen to, so go check those out and I'll talk to you again really soon. Yeah. Text Stuff is a production of

I Heart Radio's How Stuff Works. For more podcasts from my heart Radio, visit the i heart Radio app, Apple Podcasts, or wherever you listen to your favorite shows.