They weren’t letting cars in anymore — we’d have to take the crowded train, get off at the next station, and make our way to the hired driver. This was the greeting I received when I stepped off my flight in Hong Kong on a Monday night, as a fourth day of protests at the city’s international airport reached a breaking point. It was a little surreal. I walked past chanting (but exceedingly polite) protestors clad in black, most of their faces concealed by gas masks or bandanas, stocked with plenty of literature about their city and their concerns about its future.
After a little waiting and a lot of squeezing, I hopped into a packed airport train with Myriam Joire, a veteran of the mobile news industry (and occasional AP contributor), and we rubbed elbows with a hundred of our closest friends, as the air conditioning struggled to keep up. About twenty minutes later, we arrived at the station, only to find more protestors — but these ones weren’t protesting. A handful of bandana-clad youths directed offboarding passengers to the station turnstiles, which their compatriots were holding open. Presumably, this was to help their fellow protestors avoid paying for a train ride to the demonstration, but it saved a lot of anxious diverted travellers the fare, too. We walked through the increasingly crowded station and out into the sweltering pickup area (it was 90F with 80% humidity — at 8PM). Eventually, we found our driver as the lines for taxis began to stretch dozens deep, and were soon on our way to the Chinese border.
The cameras in China really are everywhere.
I don’t usually write stories like this about press trips, usually because press trips are, for lack of a better word, very boring. And at times, this trip was no different. There were certainly some less than exciting moments. But as someone who has only been to the Chinese mainland once before (and for a whole 36 hours at that), I was looking forward to getting to know the city where a truly staggering number of the world’s smartphones are produced. So, this isn’t a story about phones, per se, but it’s also not a story that isn’t about smartphones, either. It’s just one I felt compelled to write.
Huawei was founded in Shenzhen, and so the city’s relationship with the company is deep, a source of economic and national pride.
Getting across the Chinese border from Hong Kong is an odd but generally efficient affair. Both Myriam and I had short-term journalist visas we’d acquired for the trip back in the US, and that made the whole process pretty simple. Our driver handed the border agent our passports, she glanced at us, gave them back, and we drove up to the border crossing proper. At that point, we were instructed to get out of the car and walk through customs with our luggage (this is required to enter China from Hong Kong). After a simple fingerprint check, face photo, and baggage x-ray, we were through, all in under five minutes. We came out the other side, got back in the same car we’d just exited, and headed to the hotel in Shenzhen. Huawei was putting up a group of fifteen or so other journalists and YouTubers, and the next day, we’d all be visiting a local Huawei campus for a number of tours.
The tours were, to put it nicely, less than riveting (I did at least take few stock photos for use on the site). But we did receive one presentation I found deeply fascinating: a flyover history of Huawei and its relationship with the city of Shenzhen, a designated “special economic zone” inside China. Huawei was founded in Shenzhen (now known as the world’s smartphone capital), and so the city’s relationship with the company is deep, a source of economic and national pride. After hearing about this history, I only wanted to know more.
From army rags to Shezhen riches
The story Huawei tells of its founder, Ren Zhengfei, removes much of the mystery around the man. Zhengfei has been the subject of rampant speculation online, much of it false. After reading a number of interviews and hearing more about him in the company’s official history — and I hate to be a buzzkill — there’s scant evidence to suggest he was ever involved with the Chinese government or espionage. The far more believable story is that Zhengfei was a very poor, very briefly army-employed young man just trying to find his way during a perilous time in China.
Like many, Zhengfei chose to join the PLA (China’s army) in the late 1970s because it offered a life of certainty. He had a fascination with technology and engineering from a young age, and was assigned a role as a communications engineer. Zhengfei’s time in the PLA wasn’t glamorous, or especially easy — he tells one story of a chemical engineering plant he was responsible for constructing in northern China during the dead of winter, with temperatures below -20 degrees Celsius. Their shelter and equipment was so minimal that they’d sleep in shifts, taking turns to add fuel to the small stove that was the only thing between them and freezing to death through the night.
It was during this time in the late 1970s that China was nearing the end of a disastrous period known as the Cultural Revolution. But things were about to change. Just a few years into his service, Zhengfei was discharged as part of a larger drawdown of the Chinese military. Hundreds of thousands of young, unemployed Chinese men were spread across the country, and Zhengfei was fortunate enough to be sent to Shenzhen. After hopping between several local companies during the early and mid-1980s, Zhengfei formed an idea for his own business: importing telephone switching equipment to China. At the time, China had among the lowest telephone service penetration on earth — below that of even most undeveloped African nations. Zhengfei, though, believed this would change in the years to come. In 1987, with the equivalent of around 3,500 US dollars in initial capital, he founded Huawei.
Zhengfei’s nascent company imported PBX equipment (basically, analog phone switching boards) from Hong Kong for sale in mainland China. But Huawei avoided selling to highly competitive major hubs like Beijing or Shanghai, instead focusing on customers in emerging urban or harder-to-access rural markets. As the business began to grow, Zhengfei’s suppliers realized they could make more money in China by cutting out the middleman, and stopped selling their products to Huawei. This was an eventuality Zhengfei had considered, and in the early 90s, he had begun hiring engineers to design a product in house. By 1994, Huawei was ready: its first independently developed product went on sale (unsurprisingly, it was a phone switch), the C&C08. And it’s here that things get a bit hazier in Huawei’s retelling.
According to the history we were told, Huawei’s first products — combined with Zhengfei’s relentless adherence to a “the customer is always right” philosophy — came at exactly the right moment. In 1992, the government launched an initiative to hugely expand telephony in rural China, fueling Huawei’s first explosive phase of growth. Suddenly, counties and cities throughout China were operating telecom providers, and they, and the businesses that would become their customers, needed equipment. It was a perfect fit: Huawei was willing to go places and chase opportunities that foreign competitors simply wouldn’t touch, and it became a domestic success story almost overnight. The number of telephone subscribers in China in 1991 was just nine million. In 1995, it was 135 million. It was in these critical years that Huawei grew into the telecommunications giant it is today.
Huawei was willing to go places and chase opportunities that foreign competitors simply wouldn’t touch.
Huawei repeatedly came back to the idea that it was not merely its competitive practices and product availability which led to this success, but its unwavering commitment to securing the loyalty of its customers. Loyalty is a deeply held concept when doing business in China, and it was a concept Huawei understood far better than more advanced and technically capable foreign firms. One anecdote of Huawei’s commitment to its customers our presenter shared was that of a small hotel whose switching equipment would frequently go on the fritz — but only at night. When the customer complained of the trouble, Zhengfei sent a group of technicians to investigate, and they stayed up late into the wee hours hoping to discover the cause. Through the floorboards of the hotel, they heard their answer. Rats were chewing through the insulated telephone wiring, a destructive, if not particularly unusual, nuisance. But instead of telling the company to hire an exterminator, Huawei’s engineers did something unusual: they tried to solve the problem. They were successful, designing a rat-resistant cable insulator that was far harder for the critters to chew. It’s a cute story, and while I have no reason in particular to doubt it, it still sounds very much like a story. But you’ve got to admit, it’s a good one.
A trip to smartphone city
Being the guest of one of China’s richest and most influential companies is certainly an experience in and of itself, even aside all the other reasons we were there. It helps that 5-star hotels in Shenzhen aren’t terribly expensive, but even so, it was clear Huawei wanted us to have a taste of what it provides its well-heeled customers from around the globe. Particularly unforgettable was a lunch we were provided in Huawei’s VIP private dining wing in one of its many cafeteria buildings. A large, multi-tiered white marble water feature greeted us as we were ushered up an escalator to the dining level, where two women were performing an elaborate tea ceremony in the center of an indoor pond. After finishing our Michelin star-worthy meal (it was truly incredible, easily the food highlight of the trip), the tea ceremony performers were joined by a traditional Chinese string quartet.
Huawei is sure to provide lunch and a show for its exclusive VIP dining.
Imagine: entire hotels that you can’t actually book, and world-class white tablecloth restaurants where no amount of money can get you a table.
One of our hosts informed us that this, and many other facilities, are actually operated by Huawei’s own internal hospitality company. Its client base is so large, and its commitment to them so deep, that Huawei operates hotels, restaurants, spas, and other services strictly for its customers and guests. None are open to the public. Imagine: entire hotels that you can’t actually book, and world-class white tablecloth restaurants where no amount of money can get you a table. It truly does give you a sense of Huawei’s incredible scale — but it wasn’t until the next day we’d go somewhere that would really drive that point home.
Shenzhen is a fascinating place, one in the constant throes of development, growth, destruction, and revitalization. It’s also a city with real historical significance, having been designated the first “special economic zone” inside China in 1980. Shenzhen became the country’s national laboratory for capitalism: for the first time, companies were allowed to keep most of their profits, pay and promote employees based on their productivity rather than seniority, take money from foreign investors, lease land, and pursue growth and new opportunities for their own sake, not simply that of the Chinese nation. It was from this incubating chamber of market forces that Huawei emerged, and whether you believe the company about its independence or not, it was a definitively new kind of entity in China’s rigid, centrally planned economy.
One photo we were shown of central Shenzhen’s skyline in 1980 was taken from a dirt road a couple miles outside the city; a handful of mid-rise buildings appeared in the distance (likely government offices), but otherwise, the landscape was rural. A photo taken from the same vantage point five years later depicted a bustling paved road and the horizon of a growing metropolis. The rise of Shenzhen was unprecedented in China, and led to further regions designated as such zones over the years. Today, Shenzhen is a truly massive city: it is the 10th most populous city in the world (12.5 million), and remains among China’s most productive cities, with an estimated GDP of over $365 billion, surpassing even Hong Kong as of 2018. The scale of Shenzhen can be difficult to describe; the number of 30-plus story apartment buildings even on the outskirts of the city is almost hard to believe.
Shenzhen is also a city of contrasts. Despite boasting a fully-electrified bus and taxi fleet, along with the massive number of brand-new SUVs and sedans on the streets in the central part of the city, many citizens get around on pedalless electric bicycles that look like taped-together moped conversions. They, along with the hordes of Meituan delivery drivers (think Uber Eats or Deliveroo, but China), show how China’s rapidly advancing economy has produced some interesting juxtapositions. But it remains overwhelmingly obvious that Shenzhen is a crown jewel of China’s wealth: luxury car service is widely available, fantastic skyscrapers and 5-star hotels abound, and high-fashion shopping boutiques are plentiful. If you want to see how the well-to-do of China’s grand capitalist experiment spend their hard-earned cash, downtown Shenzhen should be near the top of your list. But wander into the older parts of the sprawling metropolis and you’ll find the buildings lose their shine and luster, the cars get older (and smaller), the scooters get denser, and the shopping gets a lot more… interesting.
Basically everything in this giant mall is fake.
While much of the group I was with on our shopping outing went to one of Shenzhen’s famed electronics markets, I went with a few others to what’s known as the commercial market. Here — provided you know where to look and who to ask — you can find nearly any name brand clothing, accessory, or otherwise desirable product. The thing is, it’s all fake. Many of you are likely familiar with the kind of knockoffs you might find in a market in cities like Hong Kong or Taipei (and on many online shopping sites); brand names are deliberately misspelled, details intentionally altered, and quality plainly suspect. Go to the right store and talk to the right person in one of Shenzhen’s commercial markets, though, and you’ll see products that are visually and qualitatively indistinguishable from the real thing to all but the brand protection experts employed by the companies being counterfeited. Down to the stickers holding together the tissue paper in their official boxes, these aren’t mere knockoffs, they’re straight up black market counterfeits, many of which likely end up passed off as genuine around the world.
These aren’t mere knockoffs, they’re straight up black market counterfeits
And despite what you may hear, China doesn’t turn a blind eye to these sophisticated operations: the store we visited frequently had to hide the goods we were looking at as police attempted to catch vendors in the act (this wasn’t for dramatic effect — they were deadly serious). Catalogs of items on offer were hidden in false backs behind cupboards. Handbags without logos were on display, and when sold, one of the owner’s employees would run off to another location to retrieve the trademark-offending buckle. Another would bring in a stamping machine to press the company’s logo into the leather, using an imprint kept far back on a random shelf inside the store, and just as quickly whisked it all away back to its hiding spot. I bought a watch (which, admittedly, I found less convincing than the handbags).
From Paris to P30
The next morning, we woke up and got on our official Huawei busses. We’d be driving 90 minutes north to Dongguan, home to Huawei’s newest corporate campus. And while I’d seen pictures of it, read about it, and generally understood it was quite large, I still wasn’t fully prepared for what I saw.
Yes, this is just as big as the photo makes it look. Yes, it’s in China.
In one sentence, Huawei built a private European town in the middle of China — complete with its own light rail system. The buildings and attention to detail were stunning. It truly immerses you in an authentic sense of being on an iconic block of the 12 European cities Huawei modeled each sector after. We began in Paris at a covered “subway” station, which of course had its own full-service cafe. The quality of the stone the station was built from alone was worth gawking at: polished granite covered every inch of the place.
The cost of constructing just this one small piece of the larger campus must have been immense. The rest was no less impressive, as we sat on the perimeter train line (there are two – and eventually there will be more) that circles most of the currently-built portions of the village. We hopped off in the German storybook town of Heidelberg, complete with its iconic stone bridge.
As I walked the carefully-modeled streets and looked up at the rows and rows of windows, I wondered what was in all those dozens of European apartments, down all those alleyways, and in the halls of those castles. The answer, it turns out, is considerably less romantic than the architecture. The campus is the new epicenter of Huawei’s R&D operations, and so most of the windows of the many buildings are completely blocked with white shades. We went to a generically-European street cafe for a buffet lunch — complete with fresh sushi, various Chinese dishes, “Italian” meatballs (they weren’t), and what passed for pizza — but that was about it.
Despite its welcoming aesthetic, Huawei’s new campus is an extremely high-security zone, with the vast majority of its employees not even allowed to access most of it. It’s a bit of a pity knowing that it’s all probably filled with generic office cubicles, because the sheer scale and sense of immersion makes your imagination run wild. We walked across Heidelberg’s old bridge, which led not to the other side of the Neckar River, but to a not-quite-Luxembourg, not-quite-Versailles Parisian palace, and back onto the busses which brought us there. But our next stop may well have been far more exciting than Dongguan’s Hollywood-worthy wonders for most of you: we’d be visiting a live smartphone manufacturing line as it produced brand-new P30 Pros.
As you can guess, there’s little in the way of aesthetic embellishment inside a phone factory, all corrugated steel and anti-static floors. It was about as dramatic a departure from our morning tour of Europe as you could get. Our group donned mandated clean room clothing and hats, and for the next rather sweaty hour, went through each of the various steps involved in taking a smartphone from chips and a hunk of PCB to a shiny shrink-wrapped box headed to a warehouse somewhere around the world. Building a smartphone requires many pre-fabricated components, but it’s still pretty amazing how much is done on the assembly line.
These rows of what look like tape dispensers are actually how individual chips are stored before being mounted to the PCB.
The basic PCB (board) has all of the microchips mounted to it (a process known as SMT), and the chips themselves are fed via rolls of tape into the fully-automated machines that put the chips on the board. There are no people on the SMT line, aside from those occasionally tasked with replacing the supply of boards and component tape rolls as they’re consumed. Even the process of inspecting the boards for defects is so complex and so lengthy that it would be impractical for a human to perform — a special camera looks at every single component mounted and verifies that its placement and seating are correct, at which point the boards are moved on to high-temperature flow ovens to complete the mounting process.
Whatcha cookin? Phones.
After baking in the oven, the boards have major components like the battery, display, cameras, and various other discrete parts installed (a handful of people put some of these pieces on, machines complete the process), until they reach the last person on the assembly line. That person’s job? Mounting the pre-manufactured rear cover to the phone. It’s not exactly glamorous. Once the rear cover is mated to the guts, you have a “completed” smartphone — sort of.
Huawei says that it can spit out a completed, ready-to-ship handset every 28 seconds
Each handset is then placed inside a protective plastic case, and a machine puts them in a sort of drawer which is picked up by a small roaming robot that carries them over to the second half of the line: QA and packaging. The phones all have testing software flashed to them, machines perform a bunch of tests (even a basic drop test is performed on every phone), install the OS, and send them down the line. The last portion of the phone’s journey has the most people involved, doing things like final quality assurance, cleaning the phone (seriously), and packaging it. At first, I found this odd — cleaning and packaging seems like something a machine could easily be entrusted with. But as I was writing this piece, I realized a simple, practical reality: humans are a lot cheaper, and would be unlikely to ever present a real bottleneck unless the assembly process got a lot faster. Still, the number of humans on each line is small: under a dozen in total, and no doubt that number will just keep shrinking as time and technology move forward.
Fewer and fewer people are actually on smartphone assembly lines.
Huawei says that it can spit out a completed, ready-to-ship handset every 28 seconds on each assembly line, and those lines can quickly and easily be reconfigured to produce a completely different phone depending on what needs to be built. Each floor of each factory has probably fifteen assembly lines, and each factory has several floors. You can do the math, but think about this: Huawei shipped over 200 million phones in 2018. That requires a production capacity of 550,000 smartphones per day, with some of those days requiring far more peak capacity during major device launches. Even considering Huawei does share some of the load with outsourced manufacturers like Foxconn, the numbers are head-spinning. And no, free samples were not provided.
Doing things the Huawei
Much of the rest of our trip was a blur of mind-numbing briefings, exhibition demos, and extravagant overeating. Huawei’s commitment to hospitality was unwavering: at each morning briefing in the company’s Executive Training Center, we were served delicious coffee and teas, fine pastries, and fresh fruit (every seat was also stocked with a never-ending supply of Evian water and Mentos mints). Anything we needed was just a matter of asking. And I think there’s a clear intention in that attitude, an effort to demonstrate the values of Huawei as a company — values they really do seem to take very seriously.
Even as an American, as an outsider looking in, it was hard for me to imagine such a driven, proud, and legitimately innovative company was some hidden arm of government boogeymen trying to spy on the world. A single shred of evidence of Huawei enabling such activity would destroy its credibility, and likely its entire business. And while China’s favorable policies toward domestic firms no doubt played substantial roles Huawei’s meteoric rise, I have yet to see evidence of anything but a company that played a strong hand strongly. No doubt, Huawei is a ruthless competitor on the global market, both in its handset and network businesses, but what company in its position wouldn’t be?
As I aimlessly wandered Huawei’s 5G exhibition center as part of yet another rambling tour, something caught my eye. On a bookshelf sat internally-published literature for visitors and employees. I picked up one titled On The Record, which in its current volume is a collection of unedited transcripts from Ren Zhengfei’s interviews with western media earlier this year. Every media outlet that attended was required to agree their full interview transcripts be published. Much of the content focused on Huawei’s ongoing American banishment and Zhengfei’s daughter being arrested in Canada (where she still remains), but Huawei’s founder also shared a few more interesting tidbits that I’m unsure ever made it into the various stories those interviews resulted in. He cleared up several apparently fabricated anecdotes — he played no role in the black swans on the company’s campus (he doesn’t like them), he didn’t cook soup for his employees in the early days (he once made them a braised pig head on a business trip to Turkey, though) — but it wasn’t the anecdotes themselves that struck me so much as his at times frankness. He was an absent father who didn’t really know his children well. He admired the American economic and legal system. He believed many of his middle and upper managers were so wealthy that they were no longer productive, and probably no longer necessary. He guessed that China’s goal of becoming a global technological superpower wouldn’t be achievable in his lifetime. He thought ‘Huawei’ was a bad name when he founded the company, but didn’t have the money to file the necessary paperwork to change it. None of these statements provided vindication or repudiation of the claims America has made against Huawei — he had no reason to say any of it, really. But it was really seemed Zhengfei was laying himself and his company bare.
After reading through all of those interviews, and all of Zhengfei’s adamant, unambiguous denials — even going so far as to say he, a member of China’s communist party, would shutter his company entirely before agreeing to install backdoors in Huawei equipment — I wondered what Huawei could do or say to earn the trust of the American government. The answer, I now believe, is “nothing.” That’s not to say that Huawei isn’t hiding anything, or that its ties to the government wouldn’t inevitably be played down in any official capacity. But there has been no real smoking gun suggesting Huawei is a puppet of the state, merely that it is a significant beneficiary of Chinese government policies that benefit many domestic Chinese firms. And while its record on intellectual property is far from spotless (and one area I find Zhengfei’s professed ignorance laughable), corporate espionage is a global phenomenon. Huawei just seems to be especially bad at covering it up, and it is an issue I have yet to see the company address in a serious, believable manner.
Huawei demos a “5G” aerial drone (it’s 5G because it has a 5G hotspot sitting on it)
Huawei sits on the precipice of a potential disaster, one almost completely out of its control.
Our final dinner of the trip was at a Japanese restaurant, on the fourth floor of one of Shenzhen’s innumerable high-rises. The meal was excellent; large, beautifully arranged plates of sashimi, expertly crafted rolls, and bottles of Dassai 23 (a brew not to be missed for true sake lovers) lined the table. I can almost taste the perfectly crisp tempura and melt-in-your-mouth savory-sweetness of the unagi. It was food worth remembering. It was also yet another example of Huawei’s unending hospitality. On trips like these, you’re always meant to feel spoiled, and I’d be lying if I said it didn’t work — I rarely eat or stay like this on vacation, let alone on work travel. But hanging over all the hospitality, the endless food, the luxury hotel, and the opulent campuses was a clear subtext. Huawei sits on the precipice of a potential disaster, one almost completely out of its control. The only time I saw this acknowledged (and even then, only implicitly) was a demo of the Honor Vision TV, which runs the company’s new Harmony OS. I believe the unstated purpose of this demo — of a Chinese TV unlikely to be sold outside China, being shown to a bunch of Americans — was to prove that Huawei’s OS is real. I can tell you I saw a working smart television, and that it ran some kind of software. But it was in no way an indication Huawei would be able to avoid the impact of potentially crippling US sanctions.
Visiting Huawei during such a perilous time for the company, you’d think everyone would be on pins and needles. And doubtless, many, many, many Huawei employees are. But between the idyllic European villages, humming factories, and the Rolls Royce parked outside the office we took most of our briefings in, you’d never know.