The Chinese government helped boost Huawei’s global rise because China’s technology champion would have obtained up to $75 billion in tax breaks, funding and low-cost resources, according to a report in The Wall Streey Journal on Wednesday.
The billions of dollars in financial assistance from the Chinese government would have helped propel Huawei Technologies’ rise to the top of global telecommunications, a scale of support that in key steps eclipsed what its closest technology rivals got from their governments.
According to a Journal review of subsidies, credit facilities, tax breaks and other forms of financial assistance, Huawei had access to up to $75 billion in state support as it grew from a little-known supplier of telephone switches to the world’s largest telecommunications equipment company, with generous financing terms and price reductions of up to 30% over its rivals.
While financial support for business or industry is common in many countries, China’s assistance to Huawei, including tax exemptions that began 25 years ago, is among a number of factors that raise questions about Huawei’s relationship with the state, especially at a time when it is competing to build next-generation 5G telecommunications networks around the world.
“While Huawei has commercial interests, those commercial interests are strongly supported by the state,” Michael Wessel, a member of a U.S. congressional panel reviewing U.S.-China relations, which just now have softened their trade war, told the Journal.
The United States has expressed concern that the use of Huawei’s technology equipment could pose a security risk, should Beijing request network data from the company, although Huawei says he would never release that data to the government.
Most of this assistance, about $46 billion, comes from loans, credit lines and other assistance from government lenders.
The company saved up to $25 billion in taxes between 2008 and 2018 because of state incentives to promote the technology sector.
Among other assistance, it enjoyed $1.6 billion in grants and $2 billion in land rebates.
Huawei said in a statement to the Journal that he received “small, non-material” grants to support his research, which he said was not unusual. It was noted that much of the support, such as tax breaks for the technology sector, was available to others.
The Journal in its research made use of available public records, including company statements and property registration documents.