1. Neil western, Asia business editor: Mr. Ren, thank you very much for taking the time to talk with us again. Im sorry that we cant come to the scene to talk with you face to face this time. Due to the new crown epidemic, many people can only work remotely at home or isolate at home. I hope you are all well. Can you share with us the impact of the epidemic on Huaweis business?
Ren Zhengfei: this epidemic has a certain impact on our production, sales and delivery. Our company started to work on February 1, without any delay in the construction period, and the staff continued to arrive from the initial 70%, 80%, 90% Gradually reached a certain proportion. It is mainly because some areas are still closed and isolated, and some employees cant fully arrive. When our ability to return to work reaches 90%, the production quantity of some supporting manufacturers still cannot be improved, and the epidemic has an impact on them. Many small companies and factories do not have sanitation and epidemic prevention conditions, and the local government does not allow them to start construction. We will help them solve the problem of epidemic prevention, and help them persuade the local government to start their work under the condition of ensuring health and safety. In addition, international logistics also has an impact. Now, the number of international flights has been greatly reduced, and the air transport cost has increased by 3-5 times, which has an impact on us. It is predicted that the first quarter plan will be appropriately reduced, and it is estimated that the annual plan will not be affected.
Dan Strumpf, science and technology reporter in Hong Kong: you just mentioned that Huawei has lowered some targets. Do you mean revenue targets or other financial indicators? Can you give me more details?
Ren Zhengfei: its the first quarter revenue target.
Dan Strumpf: how much has the revenue target been lowered? Can you provide some specific information?
Ren Zhengfei: the statistics of the reduction is estimated to come out in mid April. The actual reduction is very small. The reason is that some supporting parts, as well as some countries delivery customs clearance are affected. In addition, people are still in the situation of home self isolation, and the project will also be affected. But for us, the overall impact is not significant.
DanStrumpf: in view of the isolation, customs clearance and other issues you just mentioned, HUAWEI is a global company. However, in the current situation, the difficulty of cross-border customs clearance has greatly increased, and many countries have implemented the travel ban. In this case, how does Huawei compete in the global market? In addition, how does the current situation affect your personal daily life and company management?
Ren Zhengfei: first of all, just like the remote interview now, the management company can also use the way of remote office and remote conference. Second, we reduce the flow of employees. Local employees flow locally and cross-border flows decrease. Third, some of the international contracts are now expansion projects, which are completed in the computer room and realized through software upgrading, and do not need to work in the field. So now our contract sales can continue to grow.
Dan Strumpf: how does this situation affect your personal habits and Huaweis daily work? What has changed in your work?
Ren Zhengfei: no different habits. In the past, our high-level leaders have been meeting, changing documents, sending them out, and working according to them. In the past, and today, too, there has not been much change. Now its a remote video conference, basically not affected. In the past, we must fly face-to-face, now we dont need to fly in the past, because even if we fly in the past, we also need isolation, only video, so why fly in the past?
Dan Strumpf: after everything is back to normal, do you think you will continue to make some adjustments in the future, such as holding more remote meetings and reducing international business trips?
Ren Zhengfei: I think human society will move towards information society. IBM describes it as a village called global village. Of course, it also includes the fact that airplanes arrive at a place quickly, which is also a form of global village. In the past, we had to go there by ship for several months. In the more ancient times, the ancestors could only sail across the ocean in wooden sailboats, which was relatively speaking. Under the condition of advanced communication network, we can chat through video conference just like sitting next to each other, just talking about having a cup of coffee instead of licking the screen. In addition to personal experience, remote information communication will increase. For example, during the outbreak of China, hundreds of millions of children were taught online at home, especially in the United States, Europe and many other countries. When people form a habit, they will not abandon this method. Of course, it may be reduced or reduced, but they will not abandon it. As an equipment manufacturer, we strive to meet the customers requirements in this regard.
Neil western: Mr. Ren, I know you often run around the world and interview with Huaweis grassroots employees. Now, how do you keep in touch with them and get feedback from them?
Ren Zhengfei: because I used to travel all over the hard and poor countries to understand how they used to work and live. Todays video communication and online opinions can imagine how they work and live today, and what environment and conditions should be improved to support their work. Our past experiences have made a visual contribution to today. If you havent been to the world, you cant feel it. Now, although we are isolated in different countries, in fact, our contact and communication have not changed.
2. Neil western: can we talk about the difficulties the US government has brought Huawei in the past 18 months? Last time we met, we talked about your daughter. Have you contacted her recently? How to contact? What do you want to talk about?
Ren Zhengfei: just make a phone call and give some greetings in life. Her mother and her husband are in Canada with her. She is not very lonely.
Neil western: how are the criminal cases she faces going? Have you personally taken any action in this regard?
Ren Zhengfei: we have no criminal offence, we have protested in the United States, or we will determine this issue through the progress of the lawsuit in the East District Court of New York.
Neil western: do you think the Canadian government has a role to play in this regard?
Ren Zhengfei: because Canada is a country ruled by law, first of all, its laws should be open, fair and just. It is a transparent system, and the Canadian judicial system will make the correct judgment.
Neil western: so Huawei didnt lobby the Canadian government directly?
Ren Zhengfei: no need.
3. Dan Strumpf: Id like to talk about your criminal cases in the United States. You should also know that the U.S. government has expanded the scope of the indictment against Huawei and filed new charges, including organized extortion charges. This is a very serious accusation, basically describing Huawei as a criminal organization. Do you want to respond directly to these allegations?
Ren Zhengfei: we must defend in court. We cant say what the U.S. Department of Justice says. What it says doesnt mean the final result.
Dan Strumpf: Id like to ask about Huaweis strategy over the past year. Thank you for your interview with us last year. Of course, you have also been interviewed by other media, including TV station. Last year, Huawei filed a number of lawsuits against the United States. Huawei has adopted a more radical strategy in dealing with the US government in the past year than before. Given that the US is still as tough on Huawei as it used to be, do you think the strategy adopted in the past year is effective? The court has ruled against Huawei in one of its lawsuits against the US government. Now, the U.S. government has filed a new lawsuit against Huawei. Do you think the strategy adopted by Huawei in the past year has worked?
Ren Zhengfei: either what the U.S. government says or what it says, or whether it needs to pass the judgment of the court, or through the fairness, fairness and openness of the U.S. judicial system to solve it one by one.
Neil western: you just mentioned that Huawei believes that the courts in the United States will make a fair judgment. What is Huaweis defense strategy against these allegations?
Ren Zhengfei: we still negotiate with American courts through American lawyers.
4. Neil western: in the past 15 months, Huawei has taken a series of high-profile measures, such as media interviews, legal measures taken by Huawei in the United States and other countries, and in many countries, it has made a strong counterattack against the U.S. attempt to persuade the local government to ban Huawei. Now, do you think Huaweis strategy has worked in the past 15 months? If it works, can you give some examples and what does it do?
Ren Zhengfei: it must have worked. At first, the sky was dark. What did the United States say? Because the United States is a strong country and a strong government. Generally, everyone trusts the United States government very much. Over time, the truth has been revealed more and more, and the sky has gradually turned to dark grey and medium grey. We hope to gradually turn to light grey to let the society know what kind of company Huawei is and enhance our trust. We still do business in the western ally countries of the United States, because we have been dealing with customers in these countries for decades, and the trust accumulated in these decades is precious. They will not easily be pressured to give up Huawei.
In a few days, we will release the audited financial statements for 2019. Our sales revenue increased by nearly 20% last year, and our profits increased by a large margin, which proves that the trust of our customers has not been affected by the attack of the United States on us. This year, we plan to grow on a certain scale compared with last year. This years R & D expenditure will increase by 5.8 billion US dollars compared with last year, last years R & D expenditure will be about 15 billion US dollars, and this years R & D expenditure may exceed 20 billion US dollars. We are more and more capable of overcoming difficulties, facing fewer and fewer difficulties and challenges. We are confident to achieve our sales and profit targets this year. After the plague passed, people realized that advanced information technology is also of great value in dealing with the plague. People may speed up the network construction. What we are worried about is that we dont have so much equipment to supply the world. This proves that the results of our efforts over the past ten months are correct.
Neil western: Id like to ask you a question and return to R & D later. You just said that in your opinion, many of the countries you mentioned no longer believe the trump administrations rhetoric about Huawei, but the assurance given by Huawei. Is that right?
Ren Zhengfei: I dont know why people dont believe trump. Isnt his popularity among American voters very high? The American people are very smart.
5. Dan Strumpf: follow the questions you just mentioned. You mentioned that Huawei will encounter fewer and fewer difficulties this year. Why do you feel this way? What aspects of work will become easier for Huawei? In addition, you mentioned that you are confident to achieve the financial target of this year. What are your financial goals?
Ren Zhengfei: first, we have invested so much in R & D and contracted some unhealthy product lines. We will transfer the reduced excellent engineers to the main product line, and we will make our products and services better this year. Financial performance still depends on the quality of products, the quality of services and the trust of customers. In this regard, all employees of Huawei are working hard to achieve the goal, which we believe can be achieved. You are also welcome to interview us in January next year, when you can tell us about our living conditions.
Neil western: we would also like to interview you next year. Just now you mentioned that Huaweis R & D budget will increase by 5.8 billion yuan in 2020. Can you give us a specific description of the products this budget will be used for? Which business do you like best?
Ren Zhengfei: exactly in line with the direction of our products in the past, there is no new thing, just increased the input intensity.
6. Neil western: looking back at 2019, what is Huaweis greatest achievement? Does the UK allow Huawei to participate in the decision of 5g network construction? If so, what role does Huawei play in the decision-making process?
Ren Zhengfei: we have achieved great success in 2019. First of all, thank Mr. trump. Because he has such high prestige in the world, and he attaches so much importance to Huawei, many people didnt know about Huawei, or doubted about it, especially some people in China dont believe Huawei, and they think Huawei is cheating. Trump holds up his stick for a dozen, others think Huawei is still so powerful, and they dont buy Huaweis equipment as soon as possible. When will it be? Mr. trump should have helped us a lot, and wed like to thank him for that.
Our company used to be a sprawling company, because its hard for hundreds of thousands of people to get together. The strategy Department has drafted the companys vision and mission: bring the digital world into everyone, every family and every organization, and build an intelligent world of interconnection of all things. It hopes to unify the will of its employees. In fact, these slogans are not necessarily believed or worked hard enough by Huaweis employees. But as soon as trump beat us, all the employees knew that death was coming. If we didnt work hard, we would die, frightening everyone to work hard. The grass-roots work too hard, which leads to the car running too fast. I always feel that I need to step on the brake and not allow them to run too fast, otherwise the company will be pulled apart. In this way, the grass-roots level has great drive, and our senior level has great calmness, which is the basis of our victory.
Neil western: do you think that after Trumps crackdown, countries and regions such as Europe, Australia and New Zealand are aware of Huaweis strength? Do they recognize Huawei as a technology giant more than before?
Ren Zhengfei: it should be said that it has influence. Australia, New Zealand, the United States Do not believe us, some of their operators may also be affected, but also game. Some customers still trust and understand us, so we have the confidence of stable growth.
7. Dan Strumpf: I want to ask a specific question. Huawei filed a series of lawsuits against the U.S. last year. I also went to Huawei park to attend the press conference of Huawei suing the U.S. government. I covered a lot of these lawsuits and closely watched their progress. Id like to know if its your decision to file a series of lawsuits against the U.S. government? I know that Huawei has different opinions and voices on this decision. How do you deal with these different opinions?
Ren Zhengfei: first, we are forced to fight in the United States, not actively. The stick of the United States has been hit down. We cant get hit on the left side, and then stretch out on the right side to get another hit. Therefore, it is forced to sue in court on this issue. On this issue, you should interview our lawyers and let them tell you. On this issue, we are relatively consistent internally and have no contradictions.
However, this does not involve ordinary employees, because they are to produce more food and increase soil fertility. The problems of public relations and legal affairs are solved by professional departments. We dont know what common employees think, and we dont need to understand. Their main responsibility is to do a good job in production. There are no differences within us and there is no need for coordination.
If the U.S. government revokes the lawsuit against us, we can also revoke the lawsuit against the U.S. government. However, the United States has not said so now, so we are still actively preparing. If there is any stick in the United States to fight down, we will be ready to take this stick. We cant be unprepared. If we hit the tianlinggai, we will die. Therefore, it is still necessary to block it with your hands and try to prepare defensive measures.
8. Neil western: Huawei has launched its own research operating system and application ecosystem when Googles Android system is not available. How successful has Huawei been in this regard? Whats the future?
Ren Zhengfei: our operating system has been open-source and open, and HMS will enter the market with P40. Of course, compared with the old apple and Google, we still have a gap, but there are also some features, so we are determined to enter the market. We are forced to do this because there is no sense of security. If we still use other peoples things, what should we do next time we are cut off by others? We are forced to go to Liangshan because of the lack of confession. We must try our best to make up for the delayed homework, otherwise we can no longer stand on this land.
Neil western: has Huawei communicated directly with Google recently?
Ren Zhengfei: I dont know.
Dan Strumpf: how are Huaweis smartphone sales in China and overseas so far this year?
Ren Zhengfei: it should be growing, but Im not sure about the amount of growth. I only know that the sales volume of Chinas market is about 450000 units per day, and there is a recession in the international market. This is a general judgment. Since April, the sales volume is expected to be more than 20 million units per month. But because of the plague, our tablets and computers The sales volume of related businesses has increased 5-6 times, and these tablets have already installed our HMS operating system.
Dan Strumpf: what do you think is the reason for the decline of overseas smartphone sales? What can Huawei do to reverse the downward trend?
Ren Zhengfei: for the overseas market, we dont have better means of growth, but we are making up for these problems.
9. Dan Strumpf: Mr. Ren, Id like to change the subject a little. I have read many articles about Huawei that you have written over the years. A lot of it is about your past and your visits across the United States. Of all the technology entrepreneurs in the United States, who inspired you the most? I know you have written a lot about IBM, such as about Gerstner. You have visited these companies many times. Who inspired you, or who led you?
Ren Zhengfei: the whole American science and technology community is very exciting. The constant light of Silicon Valley gives us great strength. Not only jobs, Bill Gates, Gerstner, but also Google, Facebook, Amazon The innovation spirit of many small and medium-sized enterprises is worth learning from, which gives us great encouragement. The soil of innovation in the United States is very fertile. The United States will take the most responsibility in the future human information society, because the development of the information society is very fast, the United States has such a strong ability, especially so many famous universities, and the quality of university education is also very high, which are the important basis for the revitalization of the United States.
The United States is a country that attaches great importance to education. A sick young man founded Harvard University with tens of pounds; the Railway King of the United States founded Stanford University, because Stanford University is open and open, it has created Silicon Valley. I believe that the spirit of scientific and technological innovation in the United States, and the spirit of steadfast and hard work, are all things that we need to study earnestly for a long time.
10. Neil western: as far as I know, when you founded Huawei, you worried that China was far behind the global level in innovation. Now, compared with the United States and the world, what level of innovation do you think China is at?
Ren Zhengfei: in the past 70 years in China, from a country where the main body is illiterate to today, there are few illiterates, and education has made great contributions. Chinas education is still following the path of the industrial era. It doesnt encourage and praise childrens innovation spirit enough. Naughty children in kindergartens are always criticized. Their mothers are always trying to educate them into good children, and too many tests bury their innocence. Children are the most imaginative, and their imagination has no boundary. If they go up a narrow road, the more they go along the boundary, the more clear they are, and the more inhibited their motivation for innovation. Now, whether a student is good or not depends on his exam results. If Hua Luogeng, a great mathematician in China, lives today, he may not be able to go to university. Like the United States, Chinas education in the future will be more diversified, with more academic freedom and ideological freedom, so that they can make breakthroughs in different directions.
The United States divides different schools into different types and has different teaching methods. For example, in a very famous university, the homework is very heavy. Its easy for them to go to bed at two oclock in the evening. Its also common for them to go to bed at four or five oclock in the evening when they have algorithm classes. While the most important thing for ordinary colleges and universities is to learn to abide by the law and discipline, and on this basis, they mainly cultivate their means of making a living, such as learning to row a boat, riding a horse, playing golf, skiing In the future, they think these people should go into the society to do business and make friends with common interests. Of course, they have to complete basic courses, but they are not as heavy as the courses of famous universities and Ivy League universities.
Ivy League university will assess them when they take entrance examination. For example, have they ever been to an orphanage to make contributions, or have they ever made contributions to the elderly? The most important purpose of being a leader is to love and serve the society. Because Americas famous universities cultivate leaders, political, commercial, scientific. They have a great responsibility. They must love and contribute to society. The more important the university is, the less it can cultivate sophisticated egoists, so that the society can be revitalized. Generally speaking, the education of the United States is ahead of that of China. Otherwise, why would millions of Chinese youth go to the west to study?
11. Neil western: China US relations will have a direct impact on Huawei, so Im sure you are also paying attention to the tensions between China and the US while leading the company.
Ren Zhengfei: first of all, the development of human history is rugged, and the world is flat is just an ideal that cannot be realized. The most ideal situation is that the world is a hilly land. Although there are setbacks, we can still climb this slope. But now the slope is too high, it is a high mountain, and the resistance is too great. But its not higher than the Himalayas, so the world is still communicating. We just hope that these obstacles can be solved and improved step by step, so as to promote the development of world production and the increase of human wealth, so as to fundamentally solve the problem of conflict.
12. Neil western: what do you think of Huaweis development in the next few years? What role will you play in it? Obviously, many people are speculating about your succession plan. What do you think of this?
Ren Zhengfei: Huaweis development in the next few years will only be better than that in 2019 and 2020, because we know where we are suffering, where we need to treat, and believe that in the next few years, Huawei will become more healthy. Huawei will sum up after experiencing these lessons, climbing slowly like climbing. When the company is climbing, due to physiological reasons, I am going downhill and cant accompany them to climb mountains. Find an average, and the world is flat.
If Huawei is still alive, welcome to come again!
Source: editor in charge of observer network: Qiao JunJing, nbj11279