China's Huawei reveals board members to boost transparency

The Chinese company wants to improve transparency after facing U.S. concerns that it has ties with the Chinese military

Huawei, China's largest telecommunications equipment provider, has for the first time revealed its board of directors along with its overseas sales figures, in a move to further clear its reputation following U.S. concerns that the company is tied to the Chinese military.

Huawei is the world's third-largest vendor of networking equipment, putting it behind Cisco and Ericsson, according to research firm Dell'Oro Group. But the Chinese company has seen its business deals in the U.S. hampered by allegations that the company poses a national security risk. In February, Huawei reversed an acquisition it made of a U.S. startup, after a U.S. government panel requested it to divest from the deal.

The collapse of that deal prompted Huawei to call on the U.S. government to launch a formal investigation into Huawei's status. Some of the allegations against the company partly stem from its president Ren 's service in China's People Liberation Army from 1974 to 1983 as an engineer before he retired from the military. Huawei's open letter tried to make clear Ren's background while also stressing the company is employee-owned and has never invested in military technologies.

On Monday, Huawei went even further to provide more information about the company's leadership, releasing its 2010 annual report. The document provides brief biographies and photos of its board of directors. "This demonstrates that Huawei continues to work toward transparency and standardization," the company said in an e-mail statement.

The biographies of Huawei's board members made no apparent links with China's military or government.

The report provided a short profile on Huawei's Chairwoman of the Board Sun Yafang, who joined the company in 1989. But the profile did not mention how, according to Chinese news reports, Sun once worked in China's Ministry of State Security.

Huawei was contacted, but has yet to issue a comment on Sun's background.

The annual report also gave a clearer breakdown of Huawei's revenue. In 2010, the company's revenue in overseas markets reached 120.4 billion yuan (US$18.4 billion), an increase from 33.8 percent from the previous year. In the domestic market of China, Huawei's sales revenue reached 64.7 billion yuan ($9.9 billion), a 9.7 percent increase from the year before.

In contrast, Cisco made $40 billion in sales for 2010. Ericsson has about $32.8 billion in sales.

Huawei is also a major producer of electronic devices such as mobile phones and tablets for telecommunication companies. Huawei said its device business shipped more than 120 million units, bringing sales of 30.7 billion yuan ($4.7 billion), an increase of 24.9 percent. Huawei noted the growth of its device business in both the U.S. and Japan more than doubled.

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Michael Kan

IDG News Service
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