Huawei seeks to lovebomb Ireland after US blacklisting

It's not often you run into a Chinese person willing to give a view on who will win the All-Ireland final but Jijay Shen, Huawei's man in Ireland, is happy to take a punt.

“It has to be Dublin,” he says, sitting back in his chair with the look of a man who knows what he is talking about.

That we're discussing whether Dublin can make it five in a row feels a little surreal given we're chatting at Huawei's headquarters in Shenzhen in southern China a couple of days ahead of what turned out to be a drawn final.

Huawei recently started building a Disney-esque campus a short distance away in Dongguan which, once completed, will replicate 12 European cities

Then again, things can get a bit surreal with Huawei. It recently started building a Disney-esque campus a short distance away in Dongguan which, once completed, will replicate 12 European cities. But for now, it owes much of its success to Shenzhen, formerly a rural backwater, with a GDP that now exceeds Ireland's.

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Shenzhen is a futuristic-looking city that is now home to about 20 million people. But 40 years ago it was a small town with a population of just 30,000. The success of the city, less than 30km away from Hong Kong, stems from a decision to turn it into a special economic zone. Ireland’s Shannon Free Zone served as the inspiration. Now, skyscrapers abound and the overall impression is of a place that never rests.

We’re as far away from Ireland as you could imagine, but our conversation is largely about home. Shen, who is 36 but could easily pass for someone several years younger, is accompanying a group of Irish journalists invited to the home of Huawei to be love-bombed by a company that is belatedly fighting back after a campaign by the US administration to turn it into a pariah.

Senior executives are keen to tell us their side of the story, and they are also eager to highlight the importance of Ireland to the company.

Just a few hours before my meeting with Shen, Guo Ping, one of the group's rotating chairmen, revealed plans for Huawei to invest €70 million in research and development in the Republic over the next three years.

With Shen by his side, the charismatic executive held a two-hour briefing with the Irish reporters at which he defended the Chinese company from the accusations made by US authorities. During the meeting, at which he outlined how he expects Huawei to continue to thrive despite being restricted from trading, he name checks Albert Einstein, Thomas Edison and WB Yeats, but refrains from mentioning the US president by name.

Speaking a short time later to The Irish Times, Shen stresses just how keen the company is on Ireland.

“Ireland is a very important country to us. Over the past three years, we’ve invested about €35 million there and now [we] are announcing a further €70 million investment. I think this shows our commitment to the country.”

Dangerous precedent

Huawei, which employs about 180 people across facilities in Dublin, Cork and Athlone, has said the investment focus will be on video, cloud computing, artificial intelligence (AI) and site-reliability engineering. The world's largest telecoms equipment maker, it first established operations in the Republic in 2004. In late 2017, it announced a €17.7 million investment.

The group as a whole has significantly upped its spending on R&D in recent years, with investment exceeding 101.5 billion yuan (€12.7 billion) in 2018, equivalent to about 14 per cent of its annual sales. This makes it the fifth biggest R&D spender globally behind Samsung, Alphabet/Google, Volkswagen and Microsoft, according to figures from the European Commission.

Unfortunately, we are in the position of being in the middle of a trade war between the US and China, which we don't want to be part of"

Founded in 1987, Huawei employs more than 180,000 employees across 170 countries and regions. It growth rates have been impressive until it found itself blacklisted by the US on national security grounds.

At issue is whether the company can or could hold out against Chinese government demands for back door access to user data via its technologies. The company insists it would not comply; some western governments argue it would have no choice even if it didn’t want to comply.

The company's founder and chief executive Ren Zhengfei recently warned employees that it was a "do or die" moment for the company as it flagged an expected $10 billion drop in smartphone sales due to the blacklisting.

“Unfortunately, we are in the position of being in the middle of a trade war between the US and China, which we don’t want to be part of,” is how Shen put it.

“The actions against us set a very dangerous precedent and go against the values of the international business community. If it can happen to us, it can happen to any other company or industry,” he says. “So we really need to think about working together with regulators to solve issues and avoid this kind of thing happening again.”

While not flawless, Shen’s English is pretty good. But we have a translator with us in the room as well. He checks in with her regularly to ensure nothing gets lost in translation.

“Globally we provide services in 170 countries and are serving over three billion people with our products. But over the past three years, there has not been one single incident with our network,” he says.

Shen admits the company has seen an impact in Ireland from the ongoing security controversy, with a dip in sales of smartphones. However, he adds that this has just been temporary and that sales are already starting to recover.

Smartphone seller

The current standoff with the US, he says, has not impacted on morale.

“We’re focused on the job we have to do, which is to deliver on projects and make our customers’ businesses more successful. We are 100 per cent focused on doing that,” says Shen.

He insists the company has had little in the way of discussions with the Irish Government about the current situation, but that it has previously outlined the various different strands of its business to ComReg and the Department of Communications.

While focused on manufacturing phone switches in its early years, Huawei has significantly expanded its business over time to include infrastructure used in mobile and broadband internet networks, including for 5G. It is also now the world’s second-largest smartphone seller, behind Samsung.

All the various strands of the corporation's activities are represented locally, with Huawei having recently quietly transferred its mobile services to its Aspiegel subsidiary to Dublin.

"We only had 10 employees early on and started small, selling equipment such as 3G dongles"

As Shen notes, the company has come a long way in the 14 years its been in Ireland.

“We only had 10 employees early on and started small, selling equipment such as 3G dongles,” he says. “But then we started to work on broadband projects selling transmission equipment and so on and, after that, began to work with mobile operators like Eir and Three as they expanded their networks.”

While the most recent information indicates Huawei still has a role in the 5G network rollout in Ireland, it won’t likely be in the core networks. Instead the company will provide technology in the radio access network, a less sensitive part of the telecoms infrastructure.

“We have worked with all local operators on their 5G plans and are working with them continuously to build up their networks as well as on 4G,” says Shen.

He adds that Huawei can be of help in delivering the National Broadband Plan here.

“We are willing to be part of the plan to help Ireland speed up deployment of 5G and the technology should be considered as an alternative solution to fibre in reaching homes in hard-to-reach areas,” says Shen.

Huawei has claimed consistently that its standoff with the US is due to the fact that the US dislikes it being so far ahead of the competition when it comes to 5G and AI. The company has said previously it is willing to sign “no-spy” agreements with governments that would ensure Huawei is legally responsible for preventing backdoor spying on other nations through its equipment.

No backdoor

Shen says he believes that, when it comes to cybersecurity, it isn’t just an issue for vendors; it also involves operators and regulators, all of whom must work together to ensure there are strong rules in place.

“I can tell you directly that we are willing to sign a ‘no backdoor’ agreement with the Irish Government. We can do this because we are confident we will never allow a backdoor in our equipment,” he says.

“But what about other vendors and the likes of Google, Facebook and so on. Should they also do similar?,” Shen adds.

Company insiders believe Shen, who spent five years working for Huawei in Germany before moving to Ireland, is destined for greater things and that his his move to Ireland is part of a plan to groom him for the highest levels of management at the company. Having started out with Huawei as a software engineer back in 2015, he’s already achieved significant success. And while he likes his current role, it’s obvious that Shen is ambitious. He doesn’t deny he’s willing to move elsewhere if asked.

Hailing from Ningbo, a city about 215 kilometres south of Shanghai, Shen says he first became aware of Ireland while still a child through a musical version of WB Yeats' poem When You Are Old, which was popular in China. As a besotted football fan, he was also aware of Roy Keane.

“I’ve lived in different countries across Europe and Asia, and what makes the Irish people unique is their manner. You guys are all warm and friendly,” he says. At the start I didn’t like the weather, but now I enjoy sometimes having four seasons in one day.”

Chinese foreign direct investment into the Republic rose by 75 per cent to $142 million (€128.2 million) in the first six months of the year, new figures show. This is still somewhat low compared to other countries but Shen expects many more Chinese companies to follow Huawei here.

“Ireland is a good place to do business and I think it could be a good location for Chinese and other Asian countries to locate. A lot of companies are already looking to settle here and I don’t think it is just for tax reasons but because of the business environment and access to talent,” says Shen.

Moreover, he stresses Huawei isn’t leaving anytime soon.

“Huawei will continue to invest in Ireland and to cooperate with operators to provide the best technology for broadband and mobile,” he says.

C.V.

Name: Jijay Shen

Age: 36

Position: Chief executive, Huawei Ireland

From: Ningbo, a city about 215 km south of Shanghai

Lives: Leopardstown, Dublin 18

Family: Married with a young daughter

Hobbies: Playing football, basketball and skiing. Shen also enjoys good wine and the odd craft beer.

Something you might expect: He is a company man having joined Huawei straight after finishing studying.

Something you might not expect: Shen is a big fan of Irish music and of Riverdance.