Huawei Founder Dismisses Espionage Allegations

Ren Zhengfei tells attendees at the World Economic Summit that the Chinese company was never asked to break into U.S. networks.

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Giant Chinese tech vendor Huawei Technologies for more than two years has been dogged by suspicions that its networking products could pose a national security threat to the United States.

Huawei executives have pushed back at questions about whether the company's telecommunications equipment—including networking hardware like switches and routers—could include backdoors that would give the Chinese government access to U.S. networks and sensitive data, creating launching pads for cyber-attacks.

In a Webcast meeting at the World Economic Forum at Davos, Switzerland, Jan. 22, the company's founder and chairman, Ren Zhengfei, reportedly dismissed claims by some U.S. lawmakers that Huawei technology could be used by Chinese officials for espionage.

"We are a Chinese company," Ren said, according to a report by Bloomberg. "We definitely advocate the Communist Party of China. We love our country. Having said that, we definitely will not compromise the interest of any other country or government. We comply with the laws and regulations of any other country we do business in."

A U.S. Congressional committee in 2012 issued a report that accused Huawei and fellow Chinese tech company ZTE of being national security threats because of their close ties with the Chinese government, and suggested that their telecom technologies should not be used in the United States.

Australian officials also have expressed distrust of Huawei and its products.

The controversy led Huawei executives, including Ren, to say that the company was no longer interested in selling telecom equipment in the United States, choosing instead to put their efforts into gaining traction in the European market. At the forum in Davos in 2014, Huawei executives said the company had spent $3.4 billion in 2013 to buy components, engineering services and logistical services in Europe.

At the event this year, Ren reiterated Huawei's interest in Europe.

“We don't have pressure to expand into the U.S.," Ren said, according to Bloomberg. "We have so many other markets. The U.S. market is not a must for us. We could surely do more in Europe. We have good relationships with European governments such as the U.K., France and Germany."

While Huawei looks to continue growing its networking business outside the United States, it's also investing in such areas as enterprise technology and mobile computing, including smartphones. According to Huawei officials, its mobile device unit saw revenues for 2014 grow 32 percent over 2013, due in large part to strong sales of mid-range and high-end smartphones.

During his talk at the event at Davos, Ren also touched on the mobile business, noting that Huawei trails Apple in such areas as software and cameras. What's important is running an efficient business, he said.

"We only look at two things: profit and stockpile," he said, according to Bloomberg. "It's such a low- margin business, if you have a large stockpile, it eats away at all profits. We don't want products that are low-cost, low-price and low-quality."

Despite the talk about the mobile business and internal problems—including the forgiving of almost 4,000 employees for fraudulent business practices—it was the ongoing issue of spying that generated most of the headlines.

According to a Fortune report, Ren was asked by a journalist whether Chinese officials had ever asked Huawei to break into U.S. networks.

"We have never received such a request from the Chinese government," he said. "We can't penetrate into other systems."