Huawei Case Study

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Huawei is the second largest communications equipment company worldwide in terms of revenue with over 140 offices which span across various nations and it is poised to become the largest. It was founded in 1988 as a distributor for phone switches. However, Huawei has grown as comprehensive telecommunications company with network devices , mobile broadband devices , handsets and convergence devices. Further, it is now entering into offering customer solutions and more. Initially China’s telecommunication sector was extremely weak to address this issue the government adapted a three way pronged strategy which included importing foreign equipment, encouraging joint venture and promoting indigenous research and development. Further at the time …show more content…

Even though the government role was absent during the time of founding it played the crucial role in company’s early survival. By about the 1996 the Chinese government explicitly began supporting the domestic telecommunication firms with less support now to the import policies for telecoms equipment. Further, the government support was pretty evident from the fact that made loans worth 3.9 billion in order to cover the loans for government – affiliated institutions which were not paying Huawei enough for its services. Had there been no government support i.e had there been no government policy to protect(nationally owned company), Huawei would not exist. Further there was a lot of military influence for Huawei as it received important projects such as building of telecommunications for the military which helped it develop further as a …show more content…

Earlier the Chinese government was pretty sceptical about the FDI and certain policy measures taken by the government. Further , Chen believed that too much importance was given to the heavy industry which undermined the growth of not only the light industry and agriculture but it also hampered the growth of private businesses and markets. This led to Chinese economy to be moving for the worse. Also China being a communist country and being a one party democracy there was a lot of negative influence of corruption on the business environment of the country. Companies are likely to experience bribery, political interference when acquiring public services and dealing with judicial system. A practice named gauanxi was also very prominent in China. It is a custom of building relationships based on gifts, banqueting, or small favours. It is usually considered as corruption by foreign companies to influence politicians in order to make policy decisions in their favour. However, of the late, the Chinese government led by president Xi Jinping is in the midst of a sweeping anti-corruption campaign that has led to a lot of improvement in developing the business government relation in a positive way. Also, the 1978 economic reforms in china had a great impact on the businesses. The reforms were carried out in two stages ,

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