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Trade war

Huawei's meteoric rise was fueled by help from US partners

IBM, Boston Consulting Group and Accenture advised top target in Trump’s trade war

A Huawei logo is seen on a 5G experiment device. A company official admits that there would have been no growth without the help of American partners. (Photo by Kosaku Mimura)

BEIJING -- The recent U.S. crackdown on Huawei Technologies conceals a history of American companies instrumental to the Chinese smartphone maker's spectacular ascent.

"There would be no growth without U.S. companies," a Huawei official told Nikkei, which obtained a register of its consulting partners last fall. The list includes such staples of American business as IBM, Boston Consulting Group and Accenture.

Huawei's use of American and European companies as a model is evident in everything from its devices, services and supply chain to the reorganization of its business model, workforce and finances. Those efforts have led to superior new devices and services that have propelled Huawei ahead of not only state-run enterprises at home but also Western companies, a little over 30 years on from its founding.

A slogan in the cafe of Huawei's Shenzhen headquarters encourages employees to discover new ideas by conversing with others. This open approach has prompted the company to embrace help from U.S., European and Japanese companies alike.

"We have regularly welcomed teachers from Japan to introduce Toyota's production methods," said the manager of a factory that produces Huawei's flagship smartphone, which has taken a bite out of iPhone sales.

A Huawei store in downtown Beijing. The company has come under fire from the U.S., although Ameriacn companies have spent years contributing to its growth. (Photo by Taro Yokosawa)

The company has spared no effort reducing costs, including the use of Japanese robots. This has produced cost competitiveness that apparently allows Huawei to assemble its device with less than half the staff needed to build an iPhone.

But the company's rapid growth was built on a global free trade system, which is under attack from U.S. President Donald Trump's "America First" policies and Chinese President Xi Jinping's efforts to strengthen Communist Party rule.

The U.S.-China trade war has already caused tensions to flare over Xi's "Made in China 2025" initiative to modernize domestic industry. The Trump administration and others are concerned that the Communist Party, including the People's Liberation Army, are tightening their grip on corporate groups.

Vice President Mike Pence toughened his criticism of Huawei at a security conference in Munich last week.

"A black swan on a par with the fall of the Soviet Union has swooped in," an executive at a foreign financial institution in China said about the U.S.-China frictions. A black swan, in finance parlance, is an unforeseen event with significant consequences.

As a reminder for staff to remain vigilant, Huawei keeps an actual black swan in the man-made lake outside its headquarters -- something all companies will have to keep in mind.

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