It is an industrial project as curious as expected: Huawei will unveil the details of its French factory on Tuesday morning, announced at the end of December. It is the telecommunications giant’s first production plant to be built outside of China. Huawei has chosen Brumath, near Strasbourg, to establish this strategic site, in the heart of Europe. An investment that questions, since the company is accused of espionage by the United States and ostracized in many countries including… France. But this choice responds to a carefully considered commercial strategy.
Huawei and checkbook diplomacy
This factory, a true symbol, both for Huawei and for France, should open its doors in 2023, with 300 jobs initially, then 500 eventually. The Chinese giant is going to produce telecom equipment there for mobile networks, in particular 5G. And from Brumath, Huawei will serve all of Europe. A great opportunity for Claude Sturni, president of the agglomeration of Haguenau: “I am not ready to make it a political question. We do not discuss the merits of setting up an armaments factory or “Agrifood. These are first and foremost jobs, we want them, we need them. This company will create value for all of Alsace and even well beyond,” he assures Europe 1.
In total, Huawei will invest 200 million euros in the Brumath plant. It is checkbook diplomacy, to convince the State and local actors that the company can make a positive contribution to the economy. The French subsidiary thus generates, today, 1,000 direct jobs and nearly a billion euros of purchases from French companies. The idea is therefore to forget the Chinese shadow of the parent company. “We are a French company in France,” insists an executive from Huawei France.
To this end, Huawei is stepping outside the economic framework by investing in fundamental research. Six centers, especially dedicated to mathematics, have opened in France in recent years, with the collaboration of several Fields medalists. To show white paw, Huawei also allocates the services of lobbyists such as former ministers Jean-Louis Borloo and Jean-Marie Le Guen, administrators of the French subsidiary, respectively from 2016 to 2020, and since 2020.
France is more pragmatic than its neighbors
If Huawei chose France to set up its first factory outside of China, it is because it is a country in which the company is still more or less welcome. In the United States, it is impossible, it is banned. Ditto in the UK and not much better in Germany. In France, there are many penalties since telecom operators do not have the right to use Huawei equipment in their 5G network. But the Chinese giant is not banned, far from it. “Today, the European market becomes even more important for us, almost vital even”, explained to Europe 1, Minggang Zhang, deputy general manager of Huawei France, a few months ago.
On this occasion, he announced, beyond the factory, “more investments in Europe and therefore obviously in France”. Technologically, this plant is good news. Huawei is recognized by everyone as a leader in 5G. “They are two years ahead of everyone,” assures a French specialist in electronic components. “The people of Huawei are good, even better than the others. Europe is in the process of closing itself. It’s a shame,” says the boss of a French operator.
Huawei CEO is close to Chinese power
Recognized know-how but which does not erase the criticisms aimed at Huawei. The US espionage charges are based on a Chinese law, which can force the Shenzhen flagship to pass information to the government, if the government requests it. The Americans have never provided any evidence, however, and such a data breach has never been verified in France. The link between Huawei and the Chinese state, on the other hand, is established. Founder and CEO Ren Zhengfei is a former cadre of the Chinese People’s Army, still a member of the Communist Party.
“Huawei is not a state enterprise but it symbolizes the Chinese socialist market economy. Its capital is largely owned by its employees but, in fact, it depends on the financial support of the Chinese government,” explains Jean -François Dufour, President of DCA Chine Analyze. “If Huawei has experienced such a rise in the past ten years, it is thanks to the enormous funding granted to it by Chinese state-owned banks. It is therefore certainly not a company independent of power, its survival depends on its relations with the government . “
Persistent concerns over Huawei’s opacity
It is precisely these ties to power that hamper Huawei’s partners. “We need an internal revolution on transparency and governance”, claims the boss of a French telecom operator. “You need international directors and a stock market listing, you can’t not know who owns the capital.” On the Bercy side, we welcome the Huawei plant “without cheers or particular suspicions”, tells us an advisor. “We can work with Huawei but in strategic sectors, such as telecoms, we favor European companies,” said Franck Riester, Minister of Foreign Trade and Attractiveness, on Monday. France Moves on Europe 1.
And then there is another subject: the Brumath factory is located in an area where several military sites are located, in particular of the “Intelligence” branch of the Army. A presence that questions but impossible to block the establishment of a private company. “As long as there is no risk for our sovereignty, that does not pose a problem”, we inform the government. Still, according to a defense specialist, “it is always suspect when a Chinese company sets up near a military site” and “the factory will necessarily be closely monitored”.
Huawei factory in Brumath: “France is cautious”
Antoine Bondaz is a professor at Sciences Po Paris, at the Europe-Asia campus, and associate researcher at the Foundation for Strategic Research. He was the guest of Europe 1 Tuesday morning: