In the Hinrich Foundation’s latest whitepaper on Huawei, researchers focus on how the intersection with politics has affected the company: Capturing a dragon: How economic statesmanship has shaped Huawei’s global FDI presence.
Huwaei as a global company
Huawei is known for manufacturing phones, providing technology infrastructure and leading the world in 5G telecommunications.
FDI played a major role in helping the company achieve its global reach, giving it access to new markets, foreign capital and employees. Between 2010 and 2024, the company made 308 greenfield investments abroad worth $17.4 billion, creating 50,000 jobs in 70 countries. 40% of these investments were in research and development. The company is the largest Chinese outbound investor in greenfield projects in terms of projects and jobs created.
Global backlash
The company also faced significant opposition because of its ties to the Chinese government.
In 2018, there were reports that data from the server at the African Union headquarters, built by Huawei, had been sent to China every day since 2012, an accusation the company denied. The US Department of Justice and other international companies have also accused Huawei of intellectual property theft and of helping North Korea, Iran and other states with surveillance and repression equipment.
The pressure began in 2017 when the US imposed a ban on the purchase of certain Huawei equipment from the US Department of Defense. Two years later, the US Department of Commerce’s Bureau of Industry and Security placed Huawei and its subsidiaries on the “Entity List,” which restricts the ability of US companies to export and supply equipment to Huawei without a special license.
Sanctions have continued to grow, and in 2024 the US revoked licenses to export chips to Huawei from Qualcomm and Intel. This comes as the US has sought to limit China’s technological growth, put pressure on allies to impose their own export restrictions.
Have the sanctions worked?
The US had three major concerns about Huawei’s growth: protecting the security of its digital infrastructure, ensuring secure communications with allies, and preventing Huawei from gaining a monopoly on the supply of 5G equipment.
The company has seen a huge drop in foreign investment since the US push began. Only 15% of the foreign investment projects the company has undertaken since 2010 have been announced since the beginning of 2020.
Huawei has shifted its strategy to investing in the Global South, focusing on sectors such as education and training rather than ICT manufacturing. It also retains financial support from the CCP, with generous subsidies and government contracts.
The company’s revenue peaked at $129 billion in 2020 after six years of strong growth, before falling to $88 billion in 2021. In 2023, revenue reached $99 billion, still 20% below the 2020 peak. However, the company has managed to maintain profitability, reporting a 147% increase in profit in 2023 as it took on projects in cloud computing and other areas to compensate for constraints on IT infrastructure.
“How Economic Statesmanship Shaped Huawei’s Global Footprint – White Paper” was originally created and published by Investment monitora brand of GlobalData.
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