Will Huawei Ever Break into the U.S. Market?

Denis Doyle/Bloomberg

When Huawei, the world’s second largest supplier of mobile telecommunications infrastructure equipment in the world wants to invest in the U.S. market, many issues that this Chinese company needs to address to the U.S. government before its next step.

The relative exclusion of Huawei, from the U.S., a coveted telecommunications market, has underscored U.S. concerns about China as threat, both politically and commercially. Huawei sought to address those concerns through an open letter from Deputy Chairman Ken Hu, who says the company is prepared to cooperate with American authorities in proving that it is not a national security threat.

So, will Huawei have any chance to make it success in the U.S.?

Huawei “has a trust issue in America” where China is perceived as a near peer competitor, said David Wolf, chief executive of Wolf Group Asia, a Beijing-based marketing-strategy firm. “For all the reasons that America is concerned about China’s rise … they’re equally concerned with Huawei’s entering into the United States.” “It’s not going to be easy” for Huawei to break into the U.S., “and there are no silver bullets. But over time, they need to prove—to congress, regulators, industry and American people.—that they are going to come to America and play the game by American rules,” he said.

Huawei’s lack of transparency is going to arouse suspicion, Mr. Wolf said. One problem is the mystery surrounding Huawei’s founder and CEO, Ren Zhengfei. “Any problem that a company has begins with its CEO. As Terry Gou at Foxconn discovered, it’s not enough to hide behind the success of your company or the quality of its products. More is expected.” “And the longer Huawei goes without becoming a transparent company, at least matching the level of transparency that its U.S. competitors have … the more difficult it’s going to be for them to build trust in the long run,” he said. Huawei competitor Cisco, for example, makes known the names of people on its board, and makes its executives accessible to the public.

The main issue that the U.S. government will pay attation to Huawei is how much they will know about the Chinese business and how it can provide sufficient evidence when they compete with other competitors in the U.S.

“There is never any disclosure by the U.S. authorities of what evidence or suspicions they have,” Mr. Clark said. If it’s not discrimination “then it’s up to the authorities to come clean and share the evidence of what they have against Huawei. It makes a mockery otherwise of US complaints over a lack of transparency” for U.S. companies in China. Mr. Clark argued that keeping companies like Huawei out would have costs in the U.S. “Cellular coverage in many parts of the US” is “appalling,” he said, because a lack of access to lower cost products forces providers to cut costs in other ways. Meanwhile, the company is getting excluded from major carrier contracts despite offering lower bids.

Will Huawei, or maybe we can say any companies from China, get the trust from the U.S. in the future?  It is time to lay out the standard to the Chinese business when the country has become the world’s largest market today.

About shaolinh

Shaoling Hsu holds a B.A. in Computer Science Studies from Taiwan and is currently a first-year M.A. candidate in the Communication Management program at the University of Southern California’s Annenberg School of Communication & Journalism. She has traveled many countries, including China, Singapore, U.S. and Canada. She is proficient in Mandarin, Taiwanese, and fluent in English.
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