Huawei’s UK Focus: Turning The Tide
Embattled telecoms equipment maker Huawei is hoping that Britain will become the key turning point in its quest for acceptance by the west, based on its recent flurry of initiatives there designed to show portray itself as a good corporate citizen. I’ve been reporting on China for a while now, and will openly say that Huawei is certainly doing a good job of trying to look like a western-style company by highlighting its contributions to the markets where it does business. Among the companies I follow, only PC giant Lenovo (HKEx: 992) engages in a similar level of this kind of PR.
Huawei has good reason to engage in this kind of publicity, and also good reason for choosing Britain as a key market for this recent campaign. The company has come up against stiff resistance in the west over the last year, most notably in the US where it was formally banned from selling its equipment last year due to national security concerns. The EU had stayed largely quiet on the security issue, but some politicians in Britain expressed similar concerns earlier this year about Huawei’s longstanding relationship with BT (London: BT), one of the nation’s leading telcos.
In the latest move to show its commitment to Britain, media are reporting that Huawei will open a London-based center later this year to handle its international financial matters, including treasury and risk management issues. (English article; Chinese article) Among other things, Huawei will use the center to handle its relationships with the world’s major banks that provide financing for many of its European customers.
London’s status as a European and world financial center certainly makes the city a natural choice for such a center. But that said, there’s also a very political angle to this latest announcement, since Britain is one of Huawei’s most lucrative European markets. The UK is also the only EU country so far where politicians have voiced concern about the company due to national security issues.
Huawei announced another major initiative in London just last month, when it said it would join hands with Imperial College to develop big data technology. (English article) Also earlier this year, Huawei opened a large new UK headquarters in the city of Reading. Both of those moves were part of Huawei’s commitment announced last year to spend 1.3 billion pounds ($2 billion) in British economy over the next 5 years. It said about half of that money would go to investments like the Reading and Imperial College projects, while the other half would go to local purchasing.
So the question becomes: Will all of these announcements and investments make any difference in Huawei’s quest for acceptance in the west as a real company and remove the perception that it’s really just a spying arm of Beijing? I’ll admit that I was a bit skeptical at first about this kind of PR approach, but perhaps I need to give Huawei a little more credit for crafting a smart publicity drive to alter western perceptions.
Many of these latest moves have grabbed big headlines not only in the UK, but also globally due to Huawei’s status as China’s first major high tech exporter and also because of the national security debate. Most of the coverage of these initiatives has been positive, though nearly all reports are also quick to highlight the national security issues as well. I do think this approach and focus on Britain looks like a smart tact for now, since a halt to the negative publicity in the UK could help to prevent the security issue from becoming politicized in other European markets.
Bottom line: Huawei’s series of initiatives in Britain looks like a smart campaign to try to convince the west that it’s a real company and not a spying arm of Beijing.
Related posts:
