Huawei Denied Receiving $75 Billion Aid From The Chinese Government

For a while now, Huawei hasn’t been known as a self-made successful company as Ren Zhengfei has touted. The Wall Street Journal reported that the Chinese government has given the company financial assistance worth $75 billion, which allows it to spend more comfortable than it could have otherwise.

Based on public records, the publication estimated that Huawei was granted with $46 billion of loans as well as lines of credit from state-controlled lenders, along with grants worth $1.6 billion. In addition, the firm could save about $25 billion taxes from 2008 to 2018 thanks to China’s incentives for tech companies, as well as $2 billion on purchases of land.

It’s also possible that Chinese diplomats have helped the firm too. Court documents, which the Wall Street Journal obtained, suggest that the Chinese government helped the firm with closing a deal in Pakistan by offering the Pakistani government a loan of $124.7 million via the Export-Import Bank of China. This bank also waived most of the 3% annual interest on the loan. However, the Pakistani government had to award the contract to Huawei without taking the competitive bidding process.

In response to the article, Huawei posted a series of tweets along with a statement saying:

Also, the Chinese tech giant said it reserved the right to take legal actions against the journal for a number of irresponsible and disingenuous articles.

The company emphasized its R&D spending as how it became successful, saying that the last 30 years have cost its 10-15% of its annual revenue to develop new products and technologies. Huawei also denied getting special treatments from the Chinese government.

According to the journal, most governments help the biggest firms in their countries. For instance, the US has granted frequent financial support to Boeing. Additionally, if the numbers are accurate, Huawei has received the financial assistance just as much as what China could do in an example of favoritism. Previously, Huawei also repeatedly denied having close relations with the Chinese government.

India, with the second-largest population in the world, is a growing market for mobile users and manufacturers. While Xiaomi and Samsung are leading players in the country, Huawei Mobile also eyes more market share. Thanks to affordable Huawei Mobile price in India, the company and its sub-brand Honor managed to capture 3.4 percent of total market share. And though it did not make it to the top 5 largest brands in the Indian market, the firm maintained in the top 10 as of the last quarter of 2018. However, in 2019, the ban order from the US government has affected the firm as a whole as well as Huawei Mobile India, causing a huge decline in its sales volume in India as of Q3 2019.