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Huawei Gives Foreign Employees Ownership Rights, Still a Long Way to Go for Chinese Tech Brands

Huawei wants to give foreign employees ownership rights.

Huawei wants to give foreign employees ownership rights.

Hoping to grab some attention from the international community, Huawei is continuing its charm offensive with the recent announcement that foreign employees will soon be given ownership options, a big step for the privately-owned Chinese enterprise originally established by former Chinese military officer Ren Zhengfei.

Scott Sykes, Huawei’s VP of Media Corporate Affairs, told reporters in India last week that the company is now considering opening up ownership. To alleviate concerns about security, he says they have even agreed to reveal their product source code in India. This move is likely one more step in Huawei’s attempts to coax a positive image abroad.

Huawei is now located in about 140 countries worldwide, but currently its Chinese staff (now numbering 65, 596 employees) is the only authorized group allowed to own a stake in the company.

Notable attempts to enter other markets have been spurned by government officials, as general concerns about Huawei’s connections to China’s authoritarian government have provoked careful scrutiny from regulators abroad. One by one the governments of the US, India, and Australia have all denied Huawei access to key projects and markets, beginning with its intent in 2008 to purchase 3Com, and continuing most recently with Australia’s denial of its bid to join a national broadband network project.

Though Huawei has continually denied government ties, it has never been able to prove itself to the satisfaction of Western governments. Bringing its financing into a more transparent position would be a step in the right direction, but Chinese reporters are expressing doubt that financial regulators in China will approve of this decision, as the company now comprises a foreign worker majority (140,000 employees worldwide, with 65,000 working in the China headquarters). This would mean that foreign employees would have a majority stake in the company if the measure were carried to its intended purpose. For his part, Scott Sykes made no mention of when or how the changes would be implemented, but it is likely that the Chinese government will disprove of and block such a move.

This begs the question; will Chinese tech companies ever be able to truly instill a sense of brand trust abroad? For aspiring international brands, the nitty-gritty concerns of politics can never truly be separated from trade and business, and trust is not easily won for good reasons.

Chinese technology brands, especially Tencent are beginning to take their models overseas, but can they really succeed when the world assumes they are untrustworthy? Tencent has come under fire this week, for instance, from TechinAsia, for allowing one of its developers to completely rip-off another company’s game, which reeks of the very same untrustworthiness the world often ascribes to Chinese enterprises.

China’s technology giants definitely have a role to play in the market, but they will continue to face difficulty if they do not address the perennial issue of governmental and institutional restraints and if they do not uphold international legal standards.

Source: The Economic Times

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