KEY POINTS

  • Huawei reportedly succeeded due to Chinese government's support
  • The company denies such allegations
  • It insists that its rise is based on 30 years of R&D

Huawei has been at the forefront of the U.S. and China trade war and things are not getting easier for the company.

While the company has, repeatedly, insisted that it is a self-made tech giant, it has been alleged that it is backed heavily by the Chinese government.

The Wall Street Journal published a report, on Wednesday, stating that Huawei may have received as much as $75 billion in financial insistence. Huawei refuted the allegations on its Twitter handle in an official letter it shared, along with a series of tweets.

The journal report stated that it has found, by looking into a range of publicly available records, that the company has received a whopping $46 billion in loans and lines of credit from the Chinese government-controlled lenders, along with $1.6 billion in grants. It further stated that the Chinese government also provided Huawei with $25 billion in tax rebates between 2008 and 2018 due to special incentives given to selected tech companies. The company, reportedly, also got another rebate worth $2 billion on land purchases. 

Chinese government’s help to Huawei is, allegedly, not just limited to financial assistance though. The government, reportedly, used its influence to get Huawei a deal with Pakistan by offering the country a $124.7 million loan through the Export-Import Bank of China with minimal interests and a 20-year payout period. Because of such loan conditions, the Pakistani government, allegedly, did not go through the usual bidding process and straight-off gave Huawei the contract.

Huawei, however, insisted that it owes its success to the efforts of its founder Ren Zhengfei and over 30 years of research and development.

“Once again, the  WSJ  has published untruths about Huawei based on false information. This time, wild accusations about Huawei's finances ignore our 30 years of dedicated investments in R&D that have driven innovation and the tech industry as a whole," the company said.

Huawei also stated that it reserved the right to take legal action against the WSJ  for "a number of disingenuous and irresponsible articles." The company also said that it has spent 10 percent of its annual revenue on research and developing new technologies and products. It repeatedly denied receiving support from the Chinese government.

Government-backed enterprises are nothing new. Companies, such as Boeing, have received support from the U.S. government. However, the Chinese government has been repeatedly accused of using its companies as a front of its government. In a highly competitive tech sector, from what can be seen from the scale of the support provided, Huawei has the Chinese government weighing the scales in its favor.

The Chinese government is rumored to be using its vast economic influence to assuage countries into signing up for equipment from companies such as Huawei. This is a bone of contention between the Trump administration and China -- the U.S. and many other countries are opting for Nokia and Ericsson for deploying 5G infrastructure.