
Field Notes: Highlights from Huawei - yblu
https://a16z.com/2019/05/29/field-notes-highlights-from-huawei/
======
obiefernandez
The last paragraph was fascinating...

> My family uses Apple’s phones; Apple’s ecology is very good. When family
> members travel abroad, I would gift them an Apple computer. One can’t
> narrow-mindedly believe that if you love Huawei then you must only use
> Huawei mobile phones.

> At present, public sentiment about Huawei is being spun in one of two ways.
> The first spin is that if you are patriotic then you should buy Huawei. The
> other spin is that Huawei has hijacked the patriotic sentiment of the
> people. [But this is just spin] after all, my own child doesn’t love Huawei
> [product], my own child loves Apple [product].

~~~
luminati
This is a classic submarine PR hack to "defuse" the trade war, by showing an
emphatic side. One can easily get away with such statements that can't be
demonstrably proven and hence needs to be thrown away, since it's just noise
in the context of the actual discussion (the US's sanctions on Huawei).

~~~
iforgotpassword
Which part are you referring to? I think word that the CEO plus family use
iPhones was out there for much longer than the huawei ban, so they either were
planning ahead or it's actually true.

As for the PR hack I wouldn't go as far as calling it a hack... It just sounds
very Chinese from my perspective. They do go full trump sometimes but usually
there's this harmony thing going on. Keep in mind that this is the translation
of an interview given to Chinese media, it was primarily directed at Chinese
citizens.

------
ohiovr
I enjoyed this read. There is pride but there is humility too. We are
separated by language difficulty. The 996 movement and this is a reminder to
me that we are not all that different. They did not start the trade war, and
everyone in my state desired low price goods for decades before it was
suddenly wrong to have a trade deficit.

~~~
peaktechisnow
They started the trade war before it even began by not allowing key US
companies with market access...Pretty sure they blacklisted Google and
Facebook well before we blacklisted Huawei.

~~~
joel_liu
Huawei and Facebook/Google case is not the same.

Huawei was put in the Entity list. That means two things.

1)Huawei can't sell any equipment or phone in the US. It's about market
access. It's equal to Google/Facebook were denied to access the Chinese market
if they don't obey the censorship policies. Huawei was also denied to access
mainstream America market for a long time.

2)Huawei can't buy any components and services from any American companies.
Even Google & Facebook are not accessible in China, they still have lots of
business there.

So basically, Putting Huawei in the Entity list almost means to kill Huawei
because Chips from American companies are important for their supply chain.
It's not only about market access.

That's the reason many people in China feel very angry.

~~~
creddit
The basic idea behind your point is "What we (China) did is totally fine in
terms of working against your (US) economy but you doing something different
against us (China) is NOT okay, irrespective of the magnitude of impact."

Seems pretty silly to me. China's barring of US enterprises from selling in
China is dramatically more damaging at scale than US blacklisting Huawei.

~~~
joel_liu
You misunderstood the comment. I didn't mean it's fine. Most people don't like
censorship. I just presented the perspective from the other side.

Regarding your point about the "against US economy" or "against China
economy". Maybe you are in a war mindset. If we jump out this "war" mindset,
we can see "China's barring of US enterprises from selling in China" is really
not about against the "US economy". It's about censorship.

1) There are many US companies which are very successful in China, Qualcomm,
Apple, Nike, Starbuck, etc. Actually, I rarely heard any stories about the
market access problem for non-internet companies in China.

2) There is a "forced IP transfer/partnership" issue in some sectors, for
example, the auto sector. It is very unfair. But the result of it is also very
complex. I will address it in a separate post.

3) The market access issue of many internet companies, such as
Facebook/Google, is about censorship policies. Google operated in China
several years ago, but it withdrew from the market because of the censorship
requirements from the government. Apple complies with the requirement, so it
works well in China. I didn't mean "Censorship" is a good thing. I just mean
as far as I can understand, it's about "censorship", not about "against US
economy".

"Magnitude of impact": Could you explain more about this point?

~~~
killjoywashere
> Google operated in China several years ago, but it withdrew from the market
> because of the censorship requirements from the government

Google hesitated to enter China because of the censorship requirements (1) but
eventually entered anyway, led by a researcher they hired away from Microsoft,
Kai-Fu Lee (1, 2). They exited because they caught the Chinese associates
stealing source code, and only after their first "war room" effort to nail
down exactly what was going on (1, 3).

(1) [https://www.amazon.com/Plex-Google-Thinks-Works-
Shapes/dp/14...](https://www.amazon.com/Plex-Google-Thinks-Works-
Shapes/dp/1416596585/)

(2) [https://www.cio.com/article/2425034/head-of-google-china-
lea...](https://www.cio.com/article/2425034/head-of-google-china-leaving-to-
start-new-venture.html)

(3) [https://techcrunch.com/2010/01/12/google-china-
attacks/](https://techcrunch.com/2010/01/12/google-china-attacks/)

~~~
joel_liu
Thanks for bringing these references up. However, I think the major reason is
still censorship or too much censorship & political dissent. The aim of
stealing source code is probably to hack the account of political dissents as
Google pointed out. The action was more about "the political motivation
related to dissent" than "against US economy". That's my main point.

[https://www.spiegel.de/international/business/google-co-
foun...](https://www.spiegel.de/international/business/google-co-founder-on-
pulling-out-of-china-it-was-a-real-step-backward-a-686269.html)

Brin: I don't think it's a question of taking on China. In fact, I am a great
admirer of both China and the Chinese government for the progress they have
made. It is really opposing censorship and speaking out for the freedom of
political dissent, and that's the key issue from our side.

SPIEGEL: Four years ago, you allowed your service to be censored. Why have you
changed your mind now?

Brin: The hacking attacks were the straw that broke the camel's back. There
were several aspects there: the attack directly on Google, which we believe
was an attempt to gain access to Gmail accounts of Chinese human rights
activists. But there is also a broader pattern we then discovered of simply
the surveillance of human rights activists.

"Second, we have evidence to suggest that a primary goal of the attackers was
accessing the Gmail accounts of Chinese human rights activists. "

------
jhanschoo
I cannot help but read the CEO's comments in a strategic manner, where more
than anything explicitly mentioned, they communicate an immense desire or even
need for the company to be able to intensively work with US companies again.

Almost every comment noted makes a point to praise US companies or portray
Huawei as a desirable and capable but non-threatening partner.

~~~
narnianal
Yes, please read it in a strategic manner. However also consider that a praise
can be presented in different ways. Sometimes a company is praised to increase
the company's pride. Sometimes it is praised to really show a need for
cooperation. Sometimes it is praised in a manner that shows "we could work
together but if not it's also fine". And sometimes such a representation is
honest and sometimes its fake. So at least three dimensions in every sentence.

------
freewizard
What made me particularly sick is when asked about over time working problem
(996[1]), Ren's answer was: Huawei obeys the law and protect workers, but our
workers have a calling, they won't be successful without their calling.
Foreign scientists work even harder than Chinese scientists, many foreign
scientists don't get married before 40s.

This is the finest propaganda I've seen recently, well matching the "Our great
Patriot Farmers" tweet[2]

[1]
[https://en.wikipedia.org/wiki/996_working_hour_system](https://en.wikipedia.org/wiki/996_working_hour_system)

[2]
[https://twitter.com/realdonaldtrump/status/11282610666544087...](https://twitter.com/realdonaldtrump/status/1128261066654408709)

~~~
roenxi
It isn't much of an exaggeration to say his company is under sustained attack
by the United States. Control over telecommunications is a plank in the US's
strategic dominance; if Huawei was based in Iran a WMD-found-boots-on-ground-
needed incident might even be on the cards. There are 300 million people in
the world who are notionally legally bound to try and make Huawei's life
difficult.

I'm not sure I can begrudge him propaganda. The threats to him personally and
professionally are huge.

~~~
zucker42
A great first step in encouraging technological openness would be dropping the
Chinese Firewall[1,2]. Chinese companies have had a playing field slanted
toward them for a while now. We should work toward open innovations in both
the U.S. and China.

Don't get me wrong; I disagree with the recent U.S. approach and agree that
it's not an exaggeration to call this an attack on Huawei, but we'll have far
worse things to worry about than Google removing ad-blocking if we let the
Chinese state dictate our online lives.

I don't think protectionism is the answer, but I don't think the Huawei CEO is
being completely genuine in his presentation here. It was definitely
interesting to hear his perspective though.

[1]
[https://en.wikipedia.org/wiki/Great_Firewall](https://en.wikipedia.org/wiki/Great_Firewall)
[2]
[https://en.wikipedia.org/wiki/Websites_blocked_in_mainland_C...](https://en.wikipedia.org/wiki/Websites_blocked_in_mainland_China)

~~~
dis-sys
> A great first step in encouraging technological openness would be dropping
> the Chinese Firewall[1,2].

A great first step in encouraging technological openness would be dropping the
decades long high tech embargo against China.

~~~
jonnybgood
I don’t see how that’s related to China’s Great Firewall. What decades long
embargo are you referring to?

~~~
ethbro
Indeed, especially since by all accounts a lot of the firewall is built out of
Western tech (e.g. Cisco).

------
oh_sigh
> The United States does not have the power to call on all other countries to
> close the door to Huawei.

Sure it does. The US has the sovereign right to decide who it wants to do
business with, and the right to say "if you do business with Huawei, we won't
do business with you", and leave it up to other countries to decide which
route they would like to go.

~~~
bshacklett
Agreed. It's not likely to be handled so directly, but the people who do this
negotiation are well able to make the point without saying the words. If chess
was a good analog to the wars of old, poker is a more fitting analog to
diplomacy today.

------
onemoresoop
I would like to hear what they have to say about patent infringements and
allegations that Huawei stole Cisco technology and sold it 10x cheaper.

------
peaktechisnow
"...yet we are still very grateful to the American companies. They have made a
lot of contributions to us."

And not always voluntarily :)

e.g. MacBook --> MateBook

~~~
onemoresoop
When I got one of those electric unicycles, I got mine from Inventist
(Solowheel), I was shocked to learn how badly the company got ripped off in
China. Since they were fabricated there, they copied the thing to a tee and
hundeds of companies started making the same thing, some copies bad and
dangerous, others improved. To summarize, the original company, Inventist, was
attemped a mafia style takeover, I think they were offered a few mil USD which
they refused. The gyro mechanism was based on some patented technology from
Segway and eventually one of the chinese companies took over Segway.. Real
story:( Things coming from China are now cheap but after they eliminate all
the competitors they’ll name the price. Of course, US is not an angel either,
they’re the ones to open the pandora’s box to cheap chinese labor, moved all
their factories there to gain the short term profits by eliminating the cost
of their own workers.

~~~
ggg2
wait, they bought the company with the pattent? that's exactly what american
capitalism is about!

apple bought fingerworks(?) and sat on top of their patents, refusing all
license requests, until 20(?) years later they started working on the iphone.
How exactly is the chinese abuse of patents any different?

you can't cry for solowheel without also cursing apple for the death of palm
pilot and all other portables before the iphone (not to mention the awesome
keyboard+touchpad fingerworks was delivering the months apple shut them down)

~~~
derefr
Apple is just doing what makes them money, and the Chinese company that bought
Segway is also just doing what makes it money.

The real issue is a patent system that allows someone to refuse to license a
patent. That goes against the whole point of patents. You're supposed to be
getting the innovative technology _out there_ in exchange for the right to
royalties. If technological progress has not been furthered by the
publicization of your patent (by other companies building novel devices that
they otherwise wouldn't have, using what they _learned_ from your patent),
then you don't really have a patent. You have a trade secret that the
government is helping you protect for some reason.

Patents should require licensing to keep them alive in about the same way that
trademarks require defending to keep them alive.

~~~
alasdair_
>The real issue is a patent system that allows someone to refuse to license a
patent.

One solution (suggested in the book "Radical Markets" \-
[http://radicalmarkets.com/](http://radicalmarkets.com/) ) is pretty
straightforward: charge a yearly tax of around 7% on the patent equal to
whatever the patent owner claims it is worth, with the caveat that they MUST
sell the entire patent to whoever is willing to pay the claimed "value" of
said patent - this prevents under-pricing AND over-pricing and ensures maximal
societal benefit of said government-granted monopoly.

The book goes into a lot more detail, and the authors have good solutions for
the more obvious arguments against such a scheme.

------
j_shi
Seems by and large reasonable but notably doesn't address the elephant in the
room: potential their hardware has built-in backdoors for China government
access. Should be simple enough to provide at least basic assurances (a la
Apple)

~~~
ohiovr
Backdoors come in red, white, and blue colors too besides just red and yellow.
This isn't just whataboutism, as wannacry and the like show. We have no more
accountability here or there. Traffic can be encrypted end to end anyway.
Paranoia can be counter productive. If 5g became worthless during a military
confrontation with china there are many other choices for emergency
communication. Even mentioning this has me worried with a loose cannon in the
executive.

------
mberger
I would have liked to see a comment on the extradition of the CFO to the US.

~~~
yorwba
From the full interview [https://mp.weixin.qq.com/s/BkPvcbVU-
ogZcWwFkKQqEw](https://mp.weixin.qq.com/s/BkPvcbVU-ogZcWwFkKQqEw)

抓我的家人，就是想影响我的意志，我家人给我的鼓舞就是鼓舞我的意志。女儿写给我的信说，她会长期做好思想准备，她也很乐观，我就放心了，减轻了很大压力。我要超越个人、超越家庭、超越华为来思考这个世界上的问题，否则我就不客观了。

 _Arresting my relatives is intended to affect my determination; the
encouragement I receive from my relatives is to encourage my determination. My
daughter wrote me a letter, saying that she will mentally prepare for the long
term; she 's also very optimistic; I'm relieved; this has reduced the pressure
a lot. I want to go beyond myself, beyond my family, beyond Huawei and
consider the problems of this world, otherwise I wouldn't be objective
anymore._

------
narnianal
I haven't seen it in other comments so let me add that interpretation as well:

It is not just an expression of a participant in a trade war between his and
another country. It is also an expression of a politician who wants to become
a father figure for his people.

It is very very risky to even hint at something like this in such times. It is
not impossible that we see Xi Jinping taking apart Huawei at some point to
beat a possible internal competitor.

Think about the admirable spirit one must have to put ones life on the line.
Wow. That's more than Elon Musk or Ma Yun are doing.

And it also means he's either going crazy (unlikely) or that he has a lot of
backing from political forces that try to undermine the Xi government from
within. Let's hope he's more Cao Cao than Yuan Shu.

------
pnathan
I would love to read a full translation of these remarks - along with a color
commentary regarding the cultural expectations of what a proper Chinese CEO is
expected to say vis-a-vis what a proper American CEO is expected to say.

------
caddytodaddy
I have a feeling the “spare tire” chips are chips they’ve been ripping off
from Qualcomm et al, and now they have an excuse to make them. That would
explain why he is framing it that they were just for a contingency, they never
planned on using them.

They’ve done that many times in the past, but they’re too big to get away with
it so easily now.

------
devoply
I dunno how much of this is P/R and how much is humility. If this was coming
from a CEO of a Japanese company I would be much more likely to believe him.
In the end it was his government's power moves that have started all of this.
He's not at fault but his government sure is.

~~~
hangonhn
What power moves specifically? Curious. I'm not saying the Chinese government
isn't at fault because the asymmetry of market access isn't something that we
should tolerate. But we did tolerate for a long time. So what I'm curious
about is what happened to start this change.

~~~
DiogenesKynikos
The trade war was obviously begun by Trump. There are people who are already
trying to rewrite history on this.

------
joel_liu

              Forced-IP-transfer is a double-edged sword
    

This article is about Huawei and the trade war is the larger background. I had
some entrepreneurship experience both in China and the States. "Forced IP
transfer policies" is one of the core issues between the US and China. I'd
like to share some thoughts about this issue from the perspectives of some
entrepreneur friends in China. AFAICT, the real impact of the "forced IP
transfer" is very complex. I didn't see any media report about it, so I share
it here.

The perspective from media: "Forced IP transfer policies" is very unfair
because it helps Chinese companies to get an unfair advantage. It's bad for
foreign companies and good for Chinese economies.

The perspective from many entrepreneurs in China: "Forced IP transfer
policies" is very unfair because it helps the foreign companies get an unfair
advantage. It's bad for Chinese private companies and economies.

Here is the explanation from the entrepreneurs' perspective:

1) The most "forced IP transfer" happened in the Chinese-foreign partnership
companies.

2) However, the partnership is between state-owned companies and foreign
companies.

3) Most of the state-owned companies are very inefficient. The system makes
people lazy and corruptive.

4) The partnership companies did get some technologies, often the older
technologies. However, they also get benefits from the state, very cheap land,
subsidies, etc.

5)From the perspective of local entrepreneurs: Benefits from state + Foreign
tech and brand makes the already-strong foreign companies even stronger. They
get double advantages. It's very hard to compete with them. To local
entrepreneurs, the Chinese state-owned companies + Foreign companies
partnership model kills many local private companies unfairly.

6) From the technologies side, the state-owned companies get some older
technologies, but since the state-owned companies have their own issues like
lazy, corruption. They didn't get a tech edge in the competition. The
transferred technologies outdated very fast.

One example is the Auto industry. Most auto brands from the US is very
successful in China, for example, Buick is not very successful in the US, but
the overall sales in China exceeded 10M! Ford is also very successful in China
[https://thenewswheel.com/ford-sales-in-china-
surpass-1-milli...](https://thenewswheel.com/ford-sales-in-china-
surpass-1-million-vehicles-in-november/)

Did the "transferred technologies make them less successful"? It's really hard
to say.

There is some "forced IP transfer" in some sectors, but the impact to the
overall economies may or may not positive because it makes the local private
companies in a very disadvantaged position. It's really a double-edged sword.

------
_iyig
>…on a Google and Huawei phone operating system:

>Google and Huawei are discussing together how to implement a solution.

Curious what he means by this. Such cooperation may violate U.S. law.

------
wangii
I'm annoyed by folks keep talking about Chinese govt. bans Google and Facebook
whenever they see fit.

Let's be clear: no, thanks but no! We've got 1 big brother and really not
interested 2 more.

~~~
pembrook
Comparing the power the Chinese government holds over its people to American
advertising companies that try to sell you consumer goods is laughable.

~~~
wangii
OK. how do you escape from the rule Chinese government? simple: go to another
country. how could you escape from google/fb? welcome to China!

------
m3kw9
I’m not sure if this spare tire is as potent as he is saying it is. His analog
of nuclear weapons are his spare tires(home grown microchips). I’m not sure if
it even makes sense given if they had it, they would save costs to use their
own. On the other hand, if using their own chip means they can cause more
security back doors, then that could be right, but it still doesn’t make
sense.

------
ngcc_hk
So far it is a bad PR from America. Imagine some Chinese said :

“Your world is mine, my China is mine.

I can protect my market and none of you can access unless I approve it. Many
don’t. Google, movie, ... security you know. But thous should not. you should
not use security argument.

Or legal ... Try to sue government in court ... we are now in USA court but
thou should not.

We have law on paper all Chinese are our spy. You should not.

You should free trade and you should not use national security or tariff like
us.

As your song said Imagine there is no country ... I would not buy you should.

...”

Can we just use one yardstick. And not just make China great again.

Btw have time read about hk extradition law.

