A Blueprint for China’s Tech Ambitions
Book Review: House of Huawei - Eva Dou
Authors
This book provides an interesting overview of Huawei’s remarkable ascent. It starts with how Huawei began, moving on to how it pursued technological autonomy and what was its unique leadership philosophy that has shaped its current global standing, and also provides an understanding of its fraught relationship with the West. The book reveals the story of a company defined by a commitment to research and development (R&D) from its initial years itself, an aggressive export orientation, vast global ambitions, and a deepening focus on foundational research.
Huawei began with a singular vision: to develop China’s own advanced telephone switches. Ren’s famous declaration that “a country without its own program-controlled switches is like one without an army” highlighted the need to end dependence on foreign telecommunications gear, a philosophy that shines through all that Huawei does. This helped develop an intense R&D culture, the “mattress culture” being one of the examples of this, where engineers worked day and night, sleeping on cots when exhausted. Key figures like Zheng Baoyong and the “young prodigy” Li Yinan were indispensable to these early efforts, recruited for their brilliance even at a young age. The book does talk about instances which showed that Huawei was not above what one could call “legalised imitation” in its early days, as seen with its BH-03 switch, which bore similarities to a rival’s product. This could be reflective of lax intellectual property protections in nascent Chinese markets. Huawei’s focus on R&D was also reflected in the “Basic Law” which was its management philosophy. It said that every year a minimum of 10% of sales would be ploughed into R&D. Huawei also kept pace with China’s economic reforms. Just months after tech startups were legalised in Shenzhen under a pilot program, Huawei was founded in 1987. As and when the ownership rules changed in China, it kept pace with the changes, all with a singular goal - “to become a leading world-class enterprise” in telecom gear.
One of the other insights from the book is how the Chinese state played a very significant role in nurturing Huawei’s R&D capabilities. Apart from preferential entry to the local market, Huawei was also supported with strong financial support, including a $10 billion funding allocation in 2005 by the China Development Bank for overseas expansion. This was more than double Huawei’s own revenues in 2004. This support, alongside programs like the $1 billion national semiconductor development initiative in 1996, highlights how, in quite early days, state intervention fostered strategic technologies, a concept Ren himself openly endorsed, stating that “the more intense the competition, the more state intervention is required”. Huawei’s forward strategic planning comes through its “spare tires” policy, wherein its domestic chip division, HiSilicon, had created substitutes for imported chips in advance, preparing for eventual supply chain interruptions. This came in handy when US sanctions afterwards put its access to cutting-edge chips in jeopardy.
Huawei’s export orientation and global ambitions were aggressive and calculated from the outset. Recognising the dominance of Western telecom giants, Huawei initially targeted “rogue regimes” and emerging markets where competition was less fierce and Western companies were often reluctant to operate. Its operations in Iraq and North Korea, even under UN sanctions, served as an engine for its early global rise. This was controversial, but it allowed Huawei to gain invaluable experience and market share. This was ably aided by the “wolf culture” in its sales teams, emphasising aggressiveness, teamwork, and sacrifice, which helped it spread in fiercely competitive markets. Even in war zones and during epidemics like Ebola, it continued providing service, which showcased its persistence and reliability to customers.
As Huawei ascended, its global ambitions shaped up in different forms. The construction of its Ox Horn Campus in Dongguan, designed to replicate twelve European cities, served not just as an R&D hub but also as a powerful symbol of its global aspirations and a means to impress foreign dignitaries and clients. Moving into “managed services” in 2007 was an important strategic turn, where its engineers actively ran customers’ networks. This provided it deep integration and a significant source of geopolitical importance. More importantly, it offered the company broad access to critical infrastructure. Recognising the importance of brand image, Huawei also moved into consumer electronics, particularly smartphones, which were seen as more innocuous than telecom infrastructure. Lavish marketing campaigns featuring celebrities like Scarlett Johansson helped transform its image into a “fun and fashionable brand” globally.
Beyond product development, Huawei demonstrated a profound focus on basic research and platform building. Ren Zhengfei’s long-term vision extended to becoming a technological platform that hundreds or thousands of other companies could build upon, rather than merely selling standalone products. This involved massive annual investment (a baseline of 10% of sales into R&D) and a deep dive into foundational technologies like chips through HiSilicon. Its Noah’s Ark Lab, an AI-focused research centre, has partnerships with top global universities. Huawei’s list of research partners included Oxford, Stanford, and UC Berkeley, attracting leading mathematicians and quantum physicists worldwide. The breakthrough in polar coding for 5G, which was the work of a Turkish scientist, and thereafter, required an “army of engineers,” is one of the best examples of Huawei’s commitment to converting groundbreaking academic research into industry-leading technology. This proactive engagement in basic research, often with global collaborators, allowed Huawei to achieve global leadership in 5G standard-essential patents. This was a “Sputnik moment” for China.
India can learn several lessons from Huawei for its own technological and industrial policy. First, strategic state support and targeted industrial policy are required. Huawei’s early survival and growth were helped by state-controlled bank financing, preferential market access, and a national imperative to develop indigenous technology. China picked winners in critical sectors and provided sustained, strategic backing rather than relying solely on market forces. This requires not just financial incentives but also policy alignment, guaranteed market off-take, and clear long-term goals.
Second, a long-term commitment to R&D and basic research is very important. Huawei consistently fed a significant portion of its sales back into R&D, investing in areas like 3G even when 2G dominated the market, and building “spare tires” like HiSilicon years ahead of necessity. India needs to move beyond mere assembly or incremental innovation towards foundational research in critical technologies (e.g., semiconductors, AI, advanced materials). This requires consistent public and private investment, supporting deep scientific talent, and creating an ecosystem that values long-term, high-risk research over short-term profits.
Third, an export orientation and global mindset are necessary for achieving scale and competitiveness. Huawei’s “wolf culture” and willingness to operate in challenging markets provided invaluable early experience and market share. India’s technology companies, while strong in services, often lack this. The engagement strategies in diverse markets (including developing and emerging economies) should be different and customised to different contexts.
Fourth, international talent and cooperation is essential. India must actively attract the world’s best scientists and engineers, absorb them in its R&D hubs and form partnerships with top international universities. India’s huge talent pool must be supplemented by international scientific capability and collaborations.
Last but not least, Huawei reminds us of the geopolitical stakes of technological leadership. Its emergence was viewed as a “Sputnik moment,” posing a challenge to Western technological dominance and leading to a rethinking of assumptions about innovation.