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How the United States forced Huawei to leave Europe

The world's largest telecom company in China is scaling back its operations in Europe, displacing its seasoned Western lobbyists, and shelving its aspirations to control the world.

According to interviews with more than 20 current and former staff members and strategic advisers to the company, the reasons for doing this have very little to do with the company's commercial potential — Huawei is still able to offer cutting-edge technology at lower costs than its competitors — and everything to do with politics.

Pressured by the United States and increasingly shunned on the Continent it once considered its most strategic overseas market, Huawei is shifting its attention back toward the Chinese market, concentrating its remaining European attention on the few nations — Germany and Spain, but also Hungary — still willing to play host to an organization widely viewed in the West as a security risk.

One Huawei official added, "It’s no longer a company floating on globalization."  Like most of the other Huawei employees interviewed for this article, the official spoke on the condition of anonymity to candidly characterize the business's struggles, saying, "It is a company saving its ass on the domestic market."

Ren Zhengfei, the company's founder, succinctly described Huawei's situation in a lecture to executives in July at the company's Shenzhen headquarters. He listed the three main difficulties the business has seen in the previous three years: hostility from Washington; supply chain problems caused by the coronavirus outbreak; and Russia's invasion of Ukraine, which has increased European concerns about over-dependence on nations like China.

Ren stated in his speech, "The environment we faced in 2019 was different from the one we face today. Don’t assume that we will have a brighter future ."

"We previously had an ideal for globalization striving to serve all humanity. What is our ideal today? Survival!" he continued.

The senior Western management the corporation hired only a few years ago to defend against the U.S. assault on its business are being sidelined or fired as the company enters a state of slumber in the West.

Westerners were taken into consideration, according to a Huawei employee based in Europe. According to him, t his is not the situation now, and nobody is paying attention.

Formerly a crucial centre for Huawei to advocate against European limits on its equipment, the Brussels office has been fully incorporated into European management, which is now based in Düsseldorf.

Phil Herd, a former BBC journalist who joined the company in October 2019 at the start of its fight against political pressure in Europe, left his position as head of communications this summer. Additionally, the agency recently lost at least three other crucial employees who handled lobbying and policy. The main representative to the Brussels institutions, (Tony) Jin Yong, currently oversees government affairs in Western Europe and works primarily out of the Düsseldorf office.

Paul Harrison, Huawei's U.K. Director of Communications in London, departed his position in October, and other officials followed suit shortly after. Harrison worked as a senior news editor for the UK before joining Huawei. Sky News will broadcast in 2019.

According to the neighborhood publication Challenges, the company's marketing and communications director in Paris, Stéphane Curtelin, resigned from his position in September. Prior to that, Vincent de Crayencour, a seasoned French cybersecurity specialist with substantial government experience who joined Huawei in 2020, left his position as Head of Government and Security Affairs at the Paris office. Linda Han, the organization's Chief Representative of the Paris Office, also resigned from her position before the summer.

Szymon Solnica, the company's local PR manager in Warsaw, left Huawei in September. "The crises I’ve dealt with on a daily basis in recent years were colossal ones," according to his LinkedIn post announcing his departure.

In approved interviews, Huawei officials characterized the departures as routine employee turnover. In an approved interview conducted last week, a representative for Huawei Europe said: "There is a fluctuation always in companies, not only in Huawei … Some people are leaving and some other people are coming."

However, others within the organization admitted in private that the departures reflect a significant change that started in September 2021.

After spending nearly three years in Canada awaiting extradition to the U.S. on allegations of conspiracy to commit bank fraud and wire fraud, Meng Wanzhou, Huawei's top financial officer and Ren's daughter, returned to the company's headquarters in Shenzhen at that time.

One official claimed, "The moment Meng got off the plane was the moment the globalist Huawei died."

In the legal and public relations battle between Huawei and Washington, Meng played a crucial role as the founder's daughter and the presumed heir to the company's leadership. After returning from her trip to Canada, she rose to the position of deputy chairwoman at Huawei's corporate headquarters, which led to a top-level organizational restructuring.

During the height of American pressure, (Catherine) Chen Lifang, who oversaw the company's worldwide communications division, was transferred from the board of directors to a position on the supervisory board.

Peng Bo, formerly Huawei's president of Western Europe, currently serves as the global comms department's representative on the board. He is also known as Vincent Peng in Europe. The corporation is attempting to relocate its European operations closer to Shenzhen as a result of Peng's ascent.

Guo Aibing, a former journalist for Bloomberg News in Hong Kong, is in charge of the initiative to modernize public affairs in Europe. After being dropped into Europe by helicopter, Guo is implementing cuts and consolidating the company's lobbying and communication efforts on the Continent.

Additionally, the business is revamping its operations across Europe. The corporation has unannounced intentions to integrate all of the Continent's operations into a single region, with a Düsseldorf headquarters.

Currently, Huawei splits the Continent into two markets: Western Europe, run out of Düsseldorf; and Eastern Europe and the Nordics, run out of Warsaw with a senior executive.

According to a Huawei Europe spokesperson, the restructure "will help us to bring more synergies within the whole European business operation; will bring more value more directly to our customers here in Europe."

The representative stated that the company's overall workforce levels, which are now approximately 12,000 people, will remain "stable."

Ren claims that the corporation is also cutting jobs elsewhere. In his speech this summer, the company's founder stated, "We will give up markets in some countries. For example, we will give up markets in the Five Eyes countries and India."

The United States, United Kingdom, Canada, Australia, and New Zealand have an agreement to share intelligence that is known as the "Five Eyes." Due to security concerns, all five of these nations have prohibited Huawei and other Chinese corporations from using their vital infrastructure or are in the process of doing so.

Instead, Huawei is focusing on its home market, which makes up a sizable piece of the global 5G market and where Nokia of Finland and Ericsson of Sweden are battling it out for market dominance.

For a firm that until recently invested millions of euros in lobbying and PR operations in an effort to increase and preserve its European footing, Huawei's strategic retreat is astounding.

Many people in Europe thought of Huawei as a pleasant face among the IT companies cosying up to power for the most of the 2010s. Peculiar in its methods, sure, but friendly and — to many — advantageous to the interests of the Continent because it increased competition and reduced the cost of the newest telecom networks.

The corporation became well-known for its opulent celebrations in posh locations with upscale buffets and dance performances as well as its big gift bags, which frequently included a Huawei phone. One such celebration of the Chinese new year took place at the Concert Noble in Brussels.

A later turbocharged response to political pressure from Washington over worries that the Chinese-built telecoms infrastructure poses a severe security and surveillance danger included glitzy parties.

Under U.S., those headwinds started to blow. Following Donald Trump's victory, the administration of President Barack Obama intensified into a cyclone. By 2019, the firm was subject to American sanctions, and Ren's daughter Meng was in Canada awaiting the outcome of an extradition request from the United States.

In the Trump administration, Keith Krach, a former undersecretary of state, recounted how Washington was "hitting the panic button."

He recalls questioning ministers from Europe about their interactions with China. "And they’d say, ‘Well, they’re an important trading partner’ and all that. And then they looked at both sides of the room, there’s nobody in the room, and whispered to me: ‘But we don’t trust them."

The company gave top operators in the Western world six-figure pay to help them manage the geopolitical maelstrom. According to numerous people who got similar offers, it put together a top-notch team of former Western journalists and politicians with access to Westminster and the Elysée.

The gambit first appeared to succeed.

In countries like Germany, where Trump served as an effective counterbalance, Huawei's message—that the U.S. itself posed surveillance dangers and that Washington's antagonism was motivated by business interests—gained momentum.

The argument Trump made, according to Thorsten Benner, head of the Global Public Policy Institute in Berlin, "was almost more counterproductive." Big telco companies also backed Huawei because they saw the importance of the affordable equipment and attentive customer service.

Beginning in 2020, Huawei appeared to have resisted American proposals for outright restrictions. At that time, the U.K. Boris Johnson, the prime minister, authorized the business to develop a portion of the nation's 5G infrastructure. A day later, the European Union unveiled a strategy to reduce its reliance on Chinese suppliers, but left Huawei free to urge national governments to maintain market access for its products.

The pandemic followed. Trump stepped up his anti-China campaign in May 2020 with new sanctions against Huawei that essentially cut off their supply of semiconductors as the coronavirus, which originated in Wuhan, was responsible for hundreds of deaths.

Even though the government predicted the decision would delay the introduction of the technology and add half a billion pounds in expenditures, the U.K.'s Johnson entirely changed course by July and declared all Huawei equipment would have to be removed from British 5G networks.