From a European village in China to a living smartphone factory
They no longer let in cars – we had to take the overcrowded train, get off at the next station and take us to the hired driver. This was the greeting I received when I boarded my plane in Hong Kong on Monday night, when a fourth day of protests at the city's international airport reached a breaking point. It was a bit surreal. I walked past singing (but exceedingly polite) protesters dressed in black, most of their faces hidden by gas masks or bandanas, filled with a lot of literature about their city and their concerns for the future.
After a bit of waiting and a lot of squeezing, I jumped into a full flight train with Myriam Joire, a veteran of the mobile news industry (and occasional AP contributor), and we rubbed elbows with a hundred of our closest friends, then the air conditioner struggling to keep up. About twenty minutes later we arrived at the station, only to find more protesters ̵[ads1]1; but these did not protest. A handful of bandaged youth led onboard passengers to the station's turnstiles, which their countrymen kept open. Probably this was to help their other protesters avoid paying for a train ride to the demonstration, but it saved many anxious diversion travelers the price too. We walked through the increasingly crowded station and into the buzzing pickup area (it was 90F with 80% humidity – at 8pm). Eventually we found our driver as the taxi lines began to stretch many dozens deep, and were soon on their way to the Chinese border.
The cameras in China are really everywhere.
I don't usually write stories like this about press trips, usually because press trips are, for lack of a better word, very boring. And at times, this trip was no different. There were certainly some less than exciting moments. But as someone who has only been to the Chinese mainland once before (and for a full 36 hours on it), I looked forward to getting to know the city where a truly staggering number of the world's smartphones are produced. So this is not a story about phones per se, but it is also not a story about smartphones. There was only one I felt compelled to write.
Huawei was founded in Shenzhen, which is why the city's relationship with the company is deep, a source of economic and national pride.
Crossing the Chinese border from Hong Kong is a strange but generally effective affair. Both Myriam and I had short-term journalist visas we had obtained for the trip back to the United States, and that made the whole process pretty easy. Our driver handed the border agent our passports, she looked at us, gave them back, and we drove up to the border crossing itself. At that time we were asked to get out of the car and go through customs with our luggage (this is required to enter China from Hong Kong). After a simple fingerprint check, facial photo and X-ray of luggage, we were through, all in under five minutes. We came out on the other side, got back in the same car we had just left, and headed for the hotel in Shenzhen. Huawei lined up a group of fifteen or other journalists and YouTubers, and the next day we all went to a local Huawei campus for a variety of tours.
The tours were, to put it nicely, less than riveting (I took at least a few photos for use on the site). But we got a presentation I found deeply fascinating: a flight history of Huawei and its relationship with the city of Shenzhen, a designated "special economic zone" in China. Founded in Shenzhen (now known as the smartphone capital of the world), Huawei is a city's deep relationship with the company, a source of economic and national pride. After hearing about this story, I just wanted to know more.
From army filler to Shezhen's wealth
The story Huawei tells about the founder, Ren Zhengfei, removes much of the mystery surrounding the man. Zhengfei has been the subject of spirited speculation on the Web, much of which is untrue. After reading numerous interviews and hearing more about him in the company's official history – and I hate being a buzzkill – there is little evidence to suggest that he was ever involved in the Chinese government or espionage. The far more credible story is that Zhengfei was a very poor, very short, employed young man who was just trying to find himself in a dangerous time in China.
Like many, Zhengfei chose to enlist in the PLA (China's Army) in the late 1970s because it provided a life of security. He had a fascination for technology and engineering from a young age, and got a role as a communications engineer. Zhengfei's time in the PLA was not glamorous or particularly light – he tells a story about a chemical engineering plant he was responsible for constructing in northern China during the winter, with temperatures below -20 degrees. The shelter and their equipment were so minimal that they slept in turns and took turns to supply fuel to the small stove that was the only thing between them and freezes to death throughout the night.
It was during this time in the late 1970s that China was nearing the end of a catastrophic period known as the Cultural Revolution. But things were about to change. Just a few years after his service, Zhengfei was discharged as part of a larger move from the Chinese military. Hundreds of thousands of young, unemployed Chinese men were scattered across the country, and Zhengfei was lucky enough to be sent to Shenzhen. After jumping between several local companies in the early and mid-1980s, Zhengfei formed an idea for his own business: importing telephone switching equipment to China. At that time, China had among the lowest penetrations of telephone services on earth – below that of even the most undeveloped African nations. However, Zhengfei believed that this would change in the years to come. In 1987, with the equivalent of about $ 3500 in start-up capital, he founded Huawei.
Zhengfei's start-up company imported Hong Kong PBX equipment (basically analogue switches) from Hong Kong for sale in China. But Huawei avoided selling to highly competitive major hubs such as Beijing or Shanghai, rather than focusing on customers in new urban or more difficult to access rural markets. As the business began to grow, Zhengfee's suppliers realized that they could make more money in China by cutting out the middleman, and stopped selling their products to Huawei. This was an event Zhengfei had considered, and by the early 1990s he had begun to hire engineers to design a product in-house. In 1994, Huawei was ready: the first independently developed product was sold (surprisingly, it was a phone switch), C & C08. And this is where things get a little more dangerous when Huawei retells.
According to the story we were told, Huawi's first products – combined with Zhengfei's relentless adherence to a "customer is always right" philosophy – came at just the right moment. In 1992, the government launched an initiative to expand telephony enormously in rural China, driving Huawei's first explosive growth phase. Suddenly, counties and cities throughout China operated telecom providers, and those and businesses that would become their customers needed equipment. It fit perfectly: Huawei was willing to go places and chase opportunities that foreign competitors simply wouldn't touch, and it became a domestic success story almost overnight. The number of telephone subscribers in China in 1991 was only nine million. In 1995 it was 135 million. It was during these critical years that Huawei grew into the telecommunications giant it is today.
Huawei was willing to go places and chase opportunities that foreign competitors simply would not touch.
Huawei repeatedly came back to the idea that it was not only the competition practices and product availability that led to this success, but its unwavering commitment to ensuring customer loyalty. Loyalty is a profound concept when doing business in China, and it was a concept Huawei understood far better than more advanced and technically skilled foreign companies. An anecdote of Huawi's commitment to our customers that our host shared was that of a small hotel whose changing equipment would often go on a fritz – but only at night. When the customer complained about the problems, Zhengfei sent a group of technicians to investigate, and they stayed up in the wee hours hoping to discover the cause. Through the hotel floorboards, they heard the answer. Rats chewed through the isolated telephone lines, a devastating, if not particularly unusual, disruption of order. But instead of telling the company to hire an exterminator, Huawei's engineers did something unusual: They were trying to solve the problem. They were successful and designed a rat-proof cable insulator that was far more difficult for critters to chew. It's a sweet story, and although I have no reason to doubt it, it still sounds very much like a story . But you have to admit it's good.
A trip to the smartphone town
Being a guest of one of China's richest and most influential companies is certainly an experience in and of itself, aside from all the other reasons we were there. It helps that 5 star hotels in Shenzhen are not very expensive, but anyway it was clear that Huawei wanted us to get a taste of what it provides to its well-heeled customers from all over the world. Particularly unforgettable was a lunch we had in Huawei's VIP private dining wing in one of the many cafeteria buildings. A large, multi-layered white marble water feature greeted us as we were led up an escalator to the dining area, where two women performed an elaborate tea ceremony in the center of an indoor pond. After finishing our Michelin-starred meal (it was truly incredible, easily the highlight of the trip), the theater practitioners joined forces with a traditional Chinese string quartet.
Huawei is sure to provide lunch and a show for the exclusive VIP serving.
Imagine: whole hotels you can't actually book, and world-class white canvas restaurants where no amount can get you a table.
One of our hosts informed us that this, and many other amenities, are actually run by Huawie's own in-house hospitality company. The client base is so large and committed to them so deeply that Huawei operates hotels, restaurants, spas and other services strictly for its customers and guests. No one is open to the public. Look for you: entire hotels that you can't actually book, and world-class white tablecloths where no amount of money can get you a table. It really gives you a sense of the incredible scale of Huawei – but it wasn't until the day after we went somewhere that would really drive this point home.
Shenzhen is a fascinating place, in a constant development, growth, destruction and revitalization. It is also a city of real historical significance, having been named the first "special economic zone" in China in 1980. Shenzhen became the country's national laboratory for capitalism: for the first time, companies were allowed to retain most of their profits, pay and promote employees based on their productivity rather than seniority, take money from foreign investors, lease land and pursue growth and new opportunities for their own sake, not just the Chinese nation's. It was from this incubating chamber of market forces that Huawei emerged, and whether you believe the company about its independence or not, it was definitely a new type of entity in China's rigid, centrally planned economy.
A photo we were shown of the Shenzhen center of Skyline in 1980 was taken from a dirt road a few miles outside the city; a handful of center blocks appeared in the distance (probably government offices), but otherwise the landscape was rural. A picture taken from the same vantage point five years later depicted a vibrant paved road and the horizon of a growing metropolis. The rise of Shenzhen was unprecedented in China, leading to further regions designated as such zones over the years. Today, Shenzhen is a truly massive city: it is the 10th most populous city in the world (12.5 million), and remains one of China's most productive cities, with an estimated GDP of over $ 365 billion, surpassing even Hong King from 2018. The scope of Shenzhen can be difficult to describe; The number of 30-plus buildings even on the outskirts of the city is almost hard to believe.
Shenzhen is also a contrast city. Despite boasting a fully electrified bus and taxi aircraft, along with the huge number of brand new SUVs and sedans on the streets of the central part of the city, many residents come around on pedalless electric bikes that look like taped moped conversions . They, along with hordes of Meituan delivery drivers (think Uber Eats or Deliveroo, but China), show how China's rapidly advancing economy has provided some interesting juxtapositions. But it remains overwhelmingly obvious that Shenzhen is a crown jewel of China's wealth: luxury car service is widely available, fantastic skyscrapers and 5-star hotels abound, and high-fashion shopping is plentiful. To see how China's large-scale capitalist experiment is using its hard-earned cash, the center of Shenzhen should be near the top of the list. But wander into the older parts of the sprawling metropolis, and you will find that the buildings lose their shine and shine, the cars get older (and smaller), the scooters get denser, and the shopping becomes much more … interesting.
Basically, everything in this giant mall is false.
While much of the group I was shopping with went to one of Shenzhen's famous electronics markets, I went with a few others to what is known as the commercial market. Here – assuming you know where to look and who to ask – you can find almost any name clothing, accessories or other desirable product. The thing is, it's all fake. Many of you are probably familiar with what kind of knockoffs you can find in a market in cities like Hong Kong or Taipei (and at many online stores); brand names are deliberately misspelled, details intentionally changed and quality suspected. Go to the right store and talk to the right person in one of Shenzhen's commercial markets, but you will see products that are visually and qualitatively indistinguishable from the real thing for everyone, except the brand protection experts employed by the counterfeit companies. Down to the stickers that hold the tissue paper in their official boxes, these are not just knockoffs, they are straight up counterfeits from the black market, many of which probably ended up as genuine worldwide.
t just knockoffs, they are straight up counterfeits of black markets
And despite what you might hear, China doesn't turn a blind eye to these sophisticated operations: the store we visited often had to hide the items we looked at as the police were trying to catch suppliers under the law (this was not too dramatic effect – they were fatal). Catalogs of items offered were hidden in fake backs behind the cabinets. Handbags without logos were displayed on the screen, and when they were sold, one of the owner's employees would move to another location to retrieve the trademark infringing buckle. Another would bring in a stamping machine to press the company's logo into the leather, using an imprint held far back on a random shelf inside the store, and just as quickly whipped it all over to the hiding place. I bought a watch (which admittedly I was less convincing than the handbags.)
From Paris to P30
The next morning we woke up and boarded our official Huawei buses. We drive 90 minutes north to Dongguan, home to Huawei's newest business campus. And while I had seen pictures of it, read about it, and generally understood that it was quite large, I was still not fully prepared for what I saw.
Yes, this is as big as the picture makes it look. Yes, it is in China.
In one sentence, Huawei built a private European city in the middle of China – complete with its own light rail system. The buildings and attention to detail were amazing. It really immerses you in the authentic sense of being in an iconic block of the 12 European cities Huawei modeled each sector by. We started in Paris at a covered subway station, which of course had its own full-service cafe. The quality of the stone station built from alone was worth looking at: polished granite covered every inch of the site.
All aboard.
The cost of constructing just this small piece of the larger campus must have been enormous. The rest was no less impressive as we sat on the railroad line (there are two – and eventually there will be more) that circle around most of the currently built sections of the village. We hopped off in the German history book town of Heidelberg, complete with the iconic stone bridge.
As I walked the carefully modeled streets and looked up the rows and rows of windows, I wondered what was in all the dozens of European apartments, down all the alleys and the halls of those castles. The answer, it turns out, is considerably less romantic than architecture. Campus is the new epicenter of Huawei's R&D business, so most windows in the many buildings are completely blocked with white shades. We went to a generic European street cafe for a lunch buffet – complete with fresh sushi, various Chinese dishes, "Italian" meatballs (they weren't), and what went for pizza – but that was about it.
Despite the welcoming aesthetics, Huawei's new campus is an extremely high security zone, with the vast majority of staff not even allowed to access it mostly. It's a shame to know that it is probably filled with generic office space, because the sheer scale and sense of depth makes the imagination run. We walked across Heidelberg's old bridge, which did not lead to the other side of the Neckar River, but to a not-quite-Luxemburgish, not-quite-Versailles Parisian palace, and back to the buses that brought us there. But our next stop may have been far more exciting than Dongguan's Hollywood-worthy wonders for most of you: we wanted to visit a direct production line for smartphones as it produced brand new P30 Pros.
As you can guess, there is little in the way of aesthetic decoration in a telephone factory, all corrugated steel and antistatic floors. It was about as dramatic a departure from our morning tour of Europe as you could get. Our group put on clothes and hats with clean rooms, and for the next rather sweaty hour, we went through each of the different steps involved in taking a smartphone from chips and a hunk of PCBs to a shiny wrapped box of courses to a warehouse somewhere around the world. Building a smartphone requires many pre-made components, but it's still amazing how much is done on the assembly line.
These rows of what looks like tape machines are actually how individual pieces are stored before they are mounted on PCBs.
The basic PCB (card) has all the microchips mounted on it (a process known as SMT), and the chips themselves are fed via rollers of tape into the fully automatic machines that put the chips on the board. There are no people on the SMT line, except those who sometimes have the task of replacing the supply of boards and component tape rollers when used. Even the process of inspecting the boards for bugs is so complex and so long that it would be impractical for a human to perform – a special camera looks at each component that is mounted and confirms that placement and placement are correct, at what point the boards are passed to high temperatures to complete the mounting process.
Whatcha cookin? Telephones.
After baking in the oven, the boards have installed important components such as battery, monitor, cameras and various other discrete parts (a handful of people put some of these pieces on, machines complete the process) until they reach the last person on the assembly line . That person's job? Mounting the finished back cover on the phone. It's not exactly glamorous. When the back cover is connected to the gut, you have a "completed" smartphone – sort of.
Huawei says it can spit out a finished, ready-to-ship handset every 28 seconds
Each handset is then placed inside a protective plastic box, and a machine puts them in a kind of drawer that is picked up by a small roaming robot that takes them over to the other half of the line: QA and packaging. The phones have all test software flashed to them, machines perform a multitude of tests (even a basic drop test is performed on each phone), install the operating system and send them down the line. The last part of the phone journey has most involved, doing things like final quality assurance, cleaning the phone (seriously) and packing it. To begin with, I thought this strange – cleaning and packaging seems like something a machine could easily be trusted. But as I wrote this piece, I realized a simple, practical reality: humans are much cheaper and there will hardly be any real bottlenecks unless the assembly process is much faster. Still, the number of people on each line is small: under a dozen in total, and no doubt the number only continues to shrink as time and technology advances.
Fewer and fewer are actually on smartphones for smartphones.
Huawei says it can spit out a ready-made, ready-to-ship handset every 28 seconds on each assembly line, and these lines can be quickly and easily reconfigured to produce a completely different phone, depending of what needs to be built. . Each floor in each factory probably has fifteen assembly lines, and each factory has several floors. You can do the math, but keep this in mind: Huawei shipped over 200 million phones in 2018. It requires a production capacity of 550,000 smartphones per day, with some of those days requiring far more peak capacity during large device launches. Although Huawei does not share parts of the load with outsourced manufacturers such as Foxconn, the numbers are head-spinning. And no, no free samples were given.
Doing things at Huawei
Much of the rest of the trip was a blur of mind-boggling briefings, exhibit demos and extravagant overeating. Huawei's commitment to hospitality was immeasurable: every morning briefing at the company's Executive Training Center, we were served delicious coffee and tea, fine cakes and fresh fruit (each seat was also endowed with an endless supply of Evian water and Mentos coins). All we needed was just to ask. And I think there is a clear intention in that attitude, an attempt to demonstrate the values ​​of Huawei as a company – values ​​they really seem to take very seriously.
Even as an American, as an outsider looking in, it was hard for me to imagine such a driven, proud and legitimately innovative company as a hidden arm of the government boogie gym trying to spy on the world . A single tile of evidence that Huawei enables such activity will destroy the credibility and probably the entire business. And while China's favorable policy towards domestic firms has undoubtedly played significant roles in Huawei's meteoric rise, I have yet to see evidence of anything other than a company that played a strong hand. No doubt Huawei is a ruthless competitor in the global market, both in handsets and networking, but which company in its position will not be?
As I wandered aimlessly Huawei's 5G Exhibition Center as part of yet another walking tour, something caught my eye. On a bookshelf sat internally published literature for visitors and staff. I picked up one titled On The Record, which in its current volume is a collection of unedited transcripts from Ren Zhengfei's interviews with Western media earlier this year. Each media outlet that participated was required to consent to the publication of the full interview transcripts. Much of the content focused on Huawie's ongoing American banishment and Zhengfei's daughter being arrested in Canada (where she still remains), but Huawi's founder also shared some more interesting things that I'm not sure ever made to the various stories these interviews resulted in He cleaned up several seemingly fabricated anecdotes – he played no part in the black swans on the company's campus (he doesn't like them), he didn't make soup for the staff in the first few days (he once made them a braised Pig head on a business trip to Turkey, though) – but it wasn't the anecdotes themselves that struck me as much as his at times candidness. He was an absent father who did not really know his children well. He admired the American economic and legal system. He believed many of his middle and top executives were so wealthy that they were no longer productive and probably no longer needed. He guessed that China's goal of becoming a global technological superpower would not be achievable during his lifetime. He thought 'Huawei' was a bad name when he founded the company, but didn't have the money to file the necessary paperwork to change it. None of these statements affirmed or rejected America's claims against Huawei – he had no reason to say anything about it, really. But it seemed as if Zhengfei lay down and his company.
After reading through all these interviews, and all Zhengfee's imminent, unequivocal denials – even going so far as to say that he, a member of the Communist Party of China, would hide his company entirely before joining installing back doors in Huawei equipment – I was wondering what Huawei could do or say to earn the American government's trust. I think now the answer is "nothing." This is not to say that Huawei is not hiding anything, or that the ties to the government will not inevitably be played down in any official capacity. But there have been no real firearms to suggest that Huawei is a puppet of the state, only that it is a significant beneficiary of Chinese government policy that benefits many domestic Chinese companies. And while the registration of intellectual property is far from impeccable (and one area I think Zhengfei's known ignorance is ridiculous), corporate espionage is a global phenomenon. Huawei seems to be particularly bad at covering it up, and that is a question I have not yet seen the company's address in a serious, credible way.
Huawei demonstrates a "5G" antenna drone (it's 5G because it has a 5G hotspot sitting on it)
Huawei is on the verge of a potential disaster, almost out of control.
Our last dinner on the trip was at a Japanese restaurant, on the fourth floor of one of Shenzhen's many high-rise buildings. The meal was excellent; large, beautifully arranged plates of sashimi, expertly made rolls and bottles of Dassai 23 (a brew not to be missed for real sake lovers) lined the table. I can almost taste the perfectly sharp tempura and melt-in-your-mouth tasty sweetness of unagi. It was food worth remembering. It was also another example of Huawei's endless hospitality. On trips like these, you're always meant to feel pampered, and I'd be lying if I said it didn't work – I rarely eat or stay on vacation, let alone work trips. But hanging over all the hospitality, the endless food, the luxury hotel and the lavish campuses was a clear subtitle. Huawei is on the verge of a potential disaster, almost out of control. The only time I saw this recognized (and even then, only implicitly) was a demo of Honor Vision TV, which runs the company's new Harmony OS. I think the ultimate purpose of this demo – about a Chinese TV that probably won't be sold outside of China and shown to a bunch of Americans – was to prove that the Huawei operating system is real. I can tell you that I saw a working smart TV and that it was running some kind of software. But it was by no means an indication that Huawei would be able to avoid the impact of potentially crippling US sanctions.
When you visited Huawei during such a dangerous time for the company, you would think everyone would wear pins and needles. And without a doubt, there are many, many, many Huawei employees. But between the idyllic European villages, the humming factories and Rolls Royce parked outside the office we took most of our orientation on, you would never know.
