A pillar box red electric train connects Paris, Verona and Grenada via Budapest’s Liberty Bridge and on to Heidelberg Castle in a 120-hectare fantasy business park dreamt up by the Chinese billionaire Ren Zhengfei.
Ren, 74, a former Red Army engineer who founded the telecommunications company Huawei in 1987 and still owns a 1.14% stake, asked the Japanese architect Kengo Kuma to recreate some of Europe’s most historic cities. He hoped to inspire an army of 25,000 research and development staff to challenge Apple, Google and Samsung.
While its US competitors keep their research facilities on lockdown to prevent corporate espionage (oft allegedly by the Chinese), Huawei is inviting the world’s media into its labs and factories in an attempt to dispel the US government’s claims that the privately held company is an arm of the Chinese state and that its technology could be used to hack into western governments.
US politicians allege that Huawei’s forthcoming 5G mobile phone networks could be hacked by Chinese spies to eavesdrop on sensitive phone calls, gain access to counter-terrorist operations – and potentially even kill targets by crashing driverless cars. Allies who allow Huawei technology inside their 5G networks have been warned that they may be frozen out of US intelligence sharing.
The US also ordered the arrest of Ren’s daughter Meng Wanzhou, who is also Huawei’s chief financial officer, over allegations that Huawei breached US sanctions on Iran.
Meng was detained in Vancouver, Canada, in December and remains under house arrest awaiting extradition to the US. Huawei vehemently denies the allegations and said it was another example of America’s political pressure tactics. Meng is suing Canada over the arrest.
“We have spent more than a decade trying hard to communicate with the US government and to prove what kind of company Huawei really is,” Catherine Chen, a Huawei board director and senior vice-president, told the Guardian in an interview at the company’s headquarters in another vast campus in nearby Shenzhen. “It’s time for the US government to present the evidence and facts that support their case.”
Chen, who has worked her way up through the ranks at Huawei over a 25-year career, said the company had tried to avoid a public spat with the the US but was ready for battle. “The US government is using a lot of their resources, and resorting to political and diplomatic means to speak ill of us,” she said. “They have interfered in our business operations. This is quite rare. Companies have seldom been treated like this.”
Huawei’s tactic is very un-Chinese: to invite dozens of members of the foreign media to tour previously secret offices and freely question senior executives. This week alone, the company spent hundreds of thousands of pounds paying for dozens of journalists to travel from across Europe, Australia, India, Africa and South America to a conference.
Taking on Silicon Valley
The new Donnguan campus, which cost yuan 10bn (£1.1bn), is vast: the equivalent of about 140 football pitches. A round trip on the train will take 22 minutes when all the 12 “towns” – including one based incongruously on Lake Windermere in the Lake District – are completed later this year. The complex will also include housing for several thousand workers, subsidised for up to eight years.
As the tram approaches the Heidelberg stop at noon, dozens of employees – most dressed similarly to Silicon Valley tech bros in jeans, logo T-shirts and hoodies – emerge from their desks inside the faux Heidelberger Schloss for lunch in one of 24 canteens (there are additional, fancier restaurants for special occasions).
On the menu at one of the canteens is tofu with noodles, sweet and sour pork for10 yuan (£1.15), or today’s special: pig trotter soup for 12 yuan. Posters tempt staff with a glass of Mossel wine with their lunch for a few extra yuan, with the slogan in English and Mandarin: “Mossel or nothing”. The Huawei Mossel wine company is wholly owned by Huawei.
Huawei began the Mossel wine brand after the company took payment from an Argentinian customer in the form of wine and beef to avoid currency controls. Most of the wine from that deal has already been drunk, and a spokesman explained that the beef wasn’t in the form of real live cows.
“We did a deal with an Argentinian operator, where we took part payment in beef. We subsequently traded some of it and also offered some to staff to sell,” he said. The company has also accepted accepted payment in grain and other commodities as a result of controls on the yuan.
At a nearby smartphone factory, workers are dressed uniformly – white lab coat, black shoes and a cap in one of three colours: white for machine operators, pink for quality controllers and blue for technical engineers. Over recent years the number of white caps has drastically reduced as Huawei strives to reduce the number of low-skilled roles among its 188,000-strong workforce.
On the production line the Guardian visited this week, there are just 17 workers – compared with 86 four years ago – as robots and AI have replaced simpler tasks. One worker had himself replaced after suggesting to his bosses that a simple robot could do his job better than him, and he was promoted to a problem-solving unit. A team leader at the factory said workers are paid a minimum of 10,000 yuan (£1,150) a month, and claimed this was 50% more than those working in similar roles at Chinese rivals.
At the start of the production line, which is today making Huawei’s new P30 smartphone (which costs £699), microchip components are feed into machines on long spools of tape and guided on to circuit boards by lasers and robots.
Some 2,500 components are soldered on to each board, joined by cameras, microphones, batteries and glass screens before emerging at the other end as a fully formed phone two and a half hours later.
Testing, which is also largely by robot, takes another 11.5 hours. Each production line spits out a new phone every 28.5 seconds. When all the lines are operational at the same time, the company makes a new phone every second.
Back in January, Apple was forced into its first warning for more than a decade of slowing sales, as a result of weak demand for its iPhones in the vast Chinese market.
Huawei, however, is growing fast. The success of its smartphones, which are considerably cheaper than Apple equivalents, helped Huawei to achieve a 20% jump in sales to a record 721bn yuan £82bn last year. Its profits soared 25% to 59bn yuan (£6.7bn).
That success has pushed Ren up the world’s rich list. According to Forbes, he is now the 83rd richest in China, with a £1.7bn personal fortune.
The Guardian’s journalist visited China as a guest of Huawei.