Huawei denies US media claim it received $75 billion in grants from Chinese government

The world’s largest telecommunications equipment supplier Huawei has rejected claims published by the Wall Street Journal (WSJ) that the company receives special treatment and huge subsidies from Beijing.

It has explained that its relationship with the Chinese government was “no different” from that of any other private company operating in the country.

The statement followed a report by the WSJ that the Chinese government had promoted Huawei’s global rise with as much as $75 billion in grants, credit facilities, tax breaks and other financial assistance.

“Like other tech companies that operate in China, including those from abroad, Huawei receives some policy support from the Chinese government,” said Karl Song, vice-president of the company’s corporate communications department. “But we have never received any additional or special treatment.”

Song explained the company’s working capital primarily comes from its own business operations (which make up 90 percent of its working capital) and external financing rather than government subsidies.

“Huawei’s external financing follows all market rules, and our cost of debt aligns with market standards,” he said.

According to the WSJ, Huawei’s subsidies in the five years to 2018 were 17 times as large as similar subsidies reported by Finnish company Nokia, the world’s second-largest telecoms equipment maker. WSJ’s estimates were based on public records including company statements and land-registry documents, with a methodology it said had been verified with subsidy analysts.

Song said: “Over the past decade, the total amount Huawei has received in R&D (research and development) subsidies from governments both inside and outside China amounted to less than 0.3 percent of our total revenue. In 2018, we only received an amount equal to 0.2 percent of our annual revenue.”

Chinese tech giant Huawei has been embroiled in the US-China trade conflict in the past year. The company was accused by the Trump administration of being a tool of the Chinese intelligence, a charge both Huawei and Beijing have repeatedly denied.

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