In the Hinrich Foundation’s latest white paper on Huawei, researchers focus on how economic policy and geopolitical tensions have affected the firm: Caging a Dragon: How economic statecraft shaped Huawei’s global FDI footprint.
Huwaei as a global company
Huawei is well-known for making phones, providing technology infrastructure and for taking the global lead in 5G telecommunications.
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FDI played an important role in helping the company attain its global reach, giving it access to new markets, foreign capital, and workers. Between 2010 and 2024, the company made 308 greenfield overseas investments worth $17.4bn, 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 the number of projects and jobs created.
Global pushback
The company has also faced major pushback for its ties to the Chinese government.
In 2018, there were reports that data from the African Union’s, Huawei-built, headquarters’ server had been being sent to China every day since 2012, an accusation that 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 equipment for surveillance and repression.
The pressure began in 2017 when the US imposed a ban on the purchase of certain Huawei equipment from the US Defense Department. Two years later, the US Commerce Department’s Bureau of Industry and Security put Huawei and its subsidiaries on the “Entity List,” which limits American companies’ ability to export and supply equipment to Huawei without a special license.
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By GlobalDataSanctions 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, pressuring allies to impose their own export restrictions.
Have sanctions worked?
The US had three main concerns regarding Huawei’s growth: protecting the safety of its digital infrastructure, ensuring secure communications with its allies and preventing Huawei from becoming a monopoly in the supply of 5G equipment.
The company has seen a huge decline in foreign investment since pressure from the US began. Only 15% of the foreign investment projects the company has undertaken since 2010 were announced since the beginning of 2020.
Huawei has shifted its strategy to investing in the Global South and targeted sectors such as education and training, rather than ICT manufacturing. It also maintains financial support from the CCP, with generous subsidies and government contracts.
The company’s revenue peaked in 2020 at $129bn, after six years of strong growth, and went down to $88bn in 2021. In 2023, revenue stood at $99bn, which was still 20% below its 2020 peak. However, the company has managed to maintain profits and, in 2023, reported a profit gain of 147% as it took up projects in cloud computing and other areas to make up for the limits on ICT infrastructure.
