Huawei stands up to US claims of state backing

Melissa Chua
17 Jun 2011

Huawei has spoken out against a US government official’s claims that the company’s rapid growth had been a result of financial backing extended by the Chinese government.

US Export-Import Bank president Fred Hochberg had attributed Huawei’s growth to a $30 billion credit line extended by the Chinese Development Bank. Foch said the credit link had allowed Huawei to offer financing to buyers at more competitive rates.

According to Reuters, Huawei’s vice president of external affairs Bill Plummer said the assertions were fundamentally untrue.

Plummer added the Chinese Development Bank had in 2004 made available as much as $10 billion in export credits to Huawei customers, and not Huawei.

When this initial agreement expired, Huawei and the Chinese Development Bank signed a further agreement for $30 billion for five more years.

Huawei’s customers have since tapped $4.25 billion of these export credits, which went into 35 projects globally. Plummer said only $2.99 billion of the $4.25 billion had been extended, and the amount was a small fraction of Huawei’s global sales to date, which has exceeded $110 billion.

The latest incident marks one in several tussles Huawei has been involved in with the US government.

The Chinese company had earlier this year walked away from a deal to acquire US server firm 3Leaf, due to pressure from the US authorities.

Huawei also dropped its bid to invest in US-based 3Com 3 years ago due to security concerns.

The chairman of Huawei’s Chinese rival ZTE has also claimed the latter faced discrimination in the US due to its roots.

Hochberg has meanwhile refused to back away from his claims. He added Huawei’s stellar performance had undoubtedly been due to backing from the ChineseDevelopment Bank.

Plummer, however, said Huawei’s current standing in the industry was the result of heavy investments into R & D coupled with low-cost domestic labor.

Huawei had also been lucky enough to snag talents from crumbling telecom companies in the early 2000s, Plummer added.

A spokeswoman for the U.S. Eximbank said Hochberg had no intention of backing away from his claims.

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