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Huawei calls on an old friend, Russia, as U.S. sanctions bite down

A Huawei stand at the 19th Shanghai International Automobile Industry Exhibition on April 20. The Chinese tech company has been hit hard by U.S. sanctions. (Hector Retamal/AFP/Getty Images)

Last month, Huawei’s president of its European and Russian research institutes, Zhou Hong, visited Novosibirsk State Technical University in Siberia. At a conference table adorned with the Russian and Chinese flags, Zhou and his hosts discussed how Russian universities could help the Chinese tech giant.

“It’s now very important for Russian researchers to work with partners at this level,” rector Anatoly Bataev told Zhou, according to an account published by the school. “We’re ready to assist in organizing such a consortium.”

Huawei’s presence in the West has plummeted since a U.S. trade ban, but in Russia, it’s expanding. The company urgently needs to replace U.S. technologies in its supply chain — and it has willing research partners in Russia.

Huawei tested AI software that could recognize Uyghur minorities and alert police, report says

One result of the partnerships will launch Wednesday: a replacement for Google’s Android operating system for smartphones. Huawei’s HarmonyOS was built with help from the company’s Russia research teams, which encompass some 1,500 staffers in Moscow, St. Petersburg, Nizhny Novgorod, Novosibirsk and Minsk, Belarus, according to Russia’s state-run Sputnik News.

Huawei’s Russian push comes as Beijing and Moscow are drawing closer under U.S. pressure. U.S. officials have accused Huawei and other Chinese tech giants of posing national security threats, while charging Russia with cyberattacks. Beijing and Moscow dispute the allegations.

Speaking with China’s top diplomat, Yang Jiechi, on Tuesday, Russian President Vladimir Putin called Sino-Russia relations the “best in history” and said Moscow was ready to strengthen strategic coordination. Putin has previously accused the United States of attacking Huawei to hold back China’s development.

Huawei’s executives had hoped the Biden administration would lift restrictions. But this month, President Biden extended predecessor Donald Trump’s 2019 executive order barring U.S. firms from using Huawei telecom gear.

Huawei is also beginning its third year on the Commerce Department Entity List, which curbs U.S. businesses from selling it technology. The company’s founder, Ren Zhengfei, said in February he feared it would be “extremely difficult” to get off the list.

Weeks after Huawei was slapped with the ban in 2019, Chinese President Xi Jinping met with Putin in Moscow, calling him his “best friend.” The same day, Russian telecom operator MTS pledged to work with Huawei on next-generation 5G networks.

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“If Russian specialists didn’t have something to offer, Huawei wouldn’t have come here,” Ivan Reva, dean of Novosibirsk State Technical University’s automation and computer engineering program, said in an interview. “They’re interested in our researchers and engineers.”

The Chinese and Russian foreign ministries did not respond to requests for comment.

Huawei said in a statement that the company plays a “responsible role to make social contribution in Russia, including creating attractive job opportunities for ICT specialists.”

Early partners

The growing partnership has historical echoes. The Chinese Communist Party relied on Soviet scientists in its early years, when Western governments did not recognize Mao Zedong’s rule.

“There was a huge technological transfer from 1949 to 1960,” said Joseph Torigian, a historian at American University in Washington. “The Soviet Union sent experts to help with Chinese industrial development.”

Ren, Huawei’s 76-year-old founder, lived through that golden era of Sino-Soviet camaraderie. He studied the Russian language, according to an early military newspaper profile. He later wrote that he grew up with Pavel Korchagin and Tonia Toumanova — characters in Nikolai Ostrovsky’s novel “How the Steel Was Tempered.”

In 1996, Ren chose Russia as Huawei’s first international market and visited Moscow with thousands of Huawei brochures in tow, as he recounted in Huawei’s employee magazine. Russian leader Boris Yeltsin and China’s Jiang Zemin had just forged a strategic partnership, a move that former secretary of state Henry Kissinger called a “declaration of independence” by both countries from U.S. influence.

Beijing was anxious as tensions with the United States over Taiwan escalated to the point of potential war, while Moscow was facing Western blowback for its war in Chechnya, said Alexander Gabuev, a Carnegie Moscow Center senior fellow.

Ren would say that geopolitics opened the door for Huawei in Russia.

“With the improvement of Sino-Soviet relations, the United States will feel even without it, the world will still turn,” he wrote in 1996. “China will undoubtedly grow rich, and the United States cannot suppress it.”

A quarter-century later, Huawei has reverted to old form, declaring it doesn’t need the West. Russia is one of the few countries Ren is known to have visited since his daughter’s 2018 arrest in Canada.

Call for cooperation

Huawei’s Russian Research Institute has been working on a range of technologies, including chips and operating systems (OS), two areas affected by U.S. sanctions.

In Novosibirsk, Huawei is looking for programmers to write and improve code called “math libraries” for its Kunpeng processor, according to the institute’s hiring website. The company issued a “call for cooperation” to help it migrate applications to different chips: “Due to processor design differences, software components written in high-level languages cannot be accurately executed after recompilation in the new architecture.”

The institute is also seeking help in “greatly improving the business competitiveness of Huawei-developed OSs.”

Huawei did not reply to questions on whether these projects were related to the U.S. sanctions.

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The research in Russia only partially offset the sanctions’ effect. Even as Huawei improves its chip algorithms, it still lacks a factory to manufacture them. All semiconductor contract manufacturers, called foundries, are off-limits because of their use of U.S. technology.

Analysts say it’s unclear whether Huawei’s core businesses can survive another two years, let alone the decade or more it will take for China to build a foundry free of U.S. intellectual property.

“Huawei is making heroic efforts to survive,” said Dan Wang, a Gavekal Dragonomics technology analyst. “But no technology company has much room for maneuver if it lacks semiconductors.”

In recent speeches, Ren has scaled down ambitions from global expansion to servicing Chinese coal mines, from leapfrogging the United States in innovation to survival. He has dubbed Huawei’s self-sufficiency push “Nanniwan,” after a gorge where Chinese soldiers grew their own food in 1941 during a Japanese economic blockade.

Huawei’s rotating chairman Ken Hu told reporters in March that the company was relying on stockpiled chips to fulfill orders. He declined to say how long supplies would last, or what Huawei would do when the company ran out.

'Higher salaries than Google'

In May 2019, weeks after being cut off by Google, Ren declared Huawei would vie with the U.S. giant for talent in Novosibirsk, home to international-level computer programmers.

“Starting today, we will offer them higher salaries than Google, to innovate on Russian soil,” he said in a speech.

Huawei’s Russia-based researchers have since filed for patents related to 5G and artificial intelligence.

Not everyone has been happy about Huawei’s recruiting effort.

“Not only do they undermine Russia’s sovereignty in information security, they are also completely destroying the labor market,” Ilya Sachkov, CEO of cybersecurity firm Group-IB, told Russian Prime Minister Mikhail Mishustin in a panel discussion in July 2020.

He said Huawei was offering salaries of $16,300 to $20,400 a month, five or six times prevailing rates.

Huawei called Sachkov’s allegations “irresponsible” and said it “categorically” denied them.

Huawei’s Russia Research Institute is still seeking researchers and interns for projects such as facial recognition and video surveillance in Moscow, speech recognition in Nizhny Novgorod and 6G technology in St. Petersburg.

“The need to combine software implementations and mathematical algorithms presupposes high qualifications at the postgraduate level and above,” one job listing says. Another reads: “It is enough to be an expert in one of these topics.”

Natasha Abbakumova contributed to this report.

Huawei tested AI software that could recognize Uyghur minorities and alert police, report says

Huawei’s new smartphone could be its last, as U.S. sanctions clamp down on access to chipsets

Huawei CEO tells staff to keep fewer records, write shorter memos