Original URL: https://www.theregister.com/2014/05/30/hold_huawei_profile_photo_diary/

Entering the Dragon: A little data from Big China

Our man plunges into the eye of China's economic typhoon

By Andrew Orlowski

Posted in On-Prem, 30th May 2014 08:30 GMT

Photo Special Huawei - perhaps the name best known to Reg readers from the Chinese industrial explosion which has transformed the global economy - is one of the most unusual and interesting companies on the planet, growing from 3,000 employees at the start of the millennium to 150,000 today.

So when the Asian colossus invited The Reg to its global analyst conference for the first time, we were there: this was a chance to have a look at a company typically described as "mysterious", and to journey into the amazing Guangdong development area, where we found Huawei HQ in the city of Shenzhen.

So here are our impressions of the visit – a photo gallery from our trip into the cauldron of China's technology-led growth story. We even had time to literally pop over the road to Foxconn.

Let’s jump in the SUV (because there are no other cars here), and head up G94 into the dense sprawl of China’s Pearl River Delta.


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The road to Guangdong

The delta, with Canton (today’s Guangzhou) at its apex, has been China’s trading face to the world for 500 years, although the surrounding region remained pretty rural and undeveloped.

The British were granted a trading concession and a territorial base on Hong Kong Island on the east side of the delta in 1841. This was extended to include a slice of mainland China in 1860, and a little more in 1898 – but not, after negotiations, the village of Shenzhen about ten miles inland. Twenty years ago, Hong Kong residents could negotiate a "death bus" ride up the unlit road to Dongguan and Guangzhou. It’s a bit different now.

The clumps of tower blocks in Hong Kong’s mainland New Territories pause to give way only briefly to a grubby and non-descript border zone – and then it’s the more numerous, rather newer tower blocks and skyscrapers of modern Shenzhen. A building twenty years old is vintage here; Shenzhen’s population has grown rapidly, from 1m in the late 1980s to 11m today. Again, that only tells part of the story.

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Downtown Shenzhen today

The region has seen similar growth, so the road that starts in Hong Kong through Shenzhen to Dongguan and the old Canton (now Guangzhou) is a continuous "ribbon city" for no less than 70 miles as the crow flies. There's no open country that entire distance; it's all heavily built up. That means giving population estimates of each bit is a bit meaningless - particularly since they're growing so fast, and the last census was four years ago. Guangzhou is reckoned to be around 14m, and Dongguan 8m.

More like America than America

And this is almost entirely vertical. To imagine Shenzhen, imagine that you've been dropped into the financial district of a modern US city, with SUVs bumper to bumper in a three line highway, and now mentally erase anything from this picture less than ten years old. Leaving town, it looks like generic US exurbia:

Most cars are European, with Mercs and Audis particularly favoured; the US was slow to capitalise on demand (for 4x4s and large saloons) that it originally created. There isn't a bicycle in sight.

The downtown corporate tower blocks seamlesly give way to residential tower blocks.

And even more tower blocks...

And even more...

Unlike (say) 60s Glasgow or Parisian banlieux, there's a lot more variety to these blocks. Most have balconies, no two are quite alike:

Turn left for Foxconn, right for Huawei

After ten miles or so this sign appears:

Indicating Foxconn to the left, and Huawei on the right. Yes, the notorious Foxconn facility that makes many of the world's smartphones and tablets. Estimates of the size of this Foxconn cluster vary wildly, the most recent being 400,000 workers. Huawei by contrast has some 40,000 on its campus, on the other side of the road.

The Foxconn HQ has fencing on the roof:

The suicide rate at Foxconn is lower than China in general, and lower than the USA - but it doesn't look good when anyone jumps off the roof. Into Huawei HQ we'll go.

Huawei's HQ is entirely white collar, reflecting the company's shift out of manufacturing (it still produces reference designs, but has outsourced the factories - handy when Foxconn is over the road). Here we'll find corporate planning, marketing and R&D. So we're looking at young engineers, marketing and corporate planning.

The central driveway mimicks Pennsylvania Avenue; that's one of severeal R&D facilities at the end. There are about 9 clusters of offices, lettered alphabetically.

The clusters of buildings are all different styles, from the shock and awe glass-and-steel style you'd expece, to the attractive low rise marketing HQ:

And here's the first surprise. Casually dressed, very young staff - there's hardly anyone over 30 here.

The staff canteen:

(Yes, you can bonk to pay).

And another surprise for a first-time visitor to mainland China - they do very imaginative vegetable dishes. A surprise because most restaurants started by emigrants will go no further than plastic seaweed or soggy pak choi.

Or alternatively, scary fried items-inna-bag. Yum

If you don't want a full meal you can pop into the building's 7-11, for a tasty chicken foot. Or something.

The campus also includes accomodation for around 7,000 staff, who can stay in digs for up to two years. This is partly to give graduates a soft landing - hiring the best engineers and computer science graduates is extremely competitive.

And here's a family by the social club. I'll leave you to work out what is wonderful and unusual about this picture. (Clue: that's not a doll in the pram).

Over to the visitor centre where Huawei's wares are shown, from base stations to handsets.

This article isn't a technology analysis, but it's worth noting that Huawei is only interested in business areas where the pipe is filled. This justified its entry into the phone market in 2011, where it has now risen to the No. 3 spot worldwide. Smartphones generate data - they fill the pipe.

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A third of Huawei's revenue is from services, with some 25 customer centres world wide "helping" telcos with long term strategy. It's another example of Chinese rationality and planning. They started from scratch and realised they didn't have a clue in many areas - marketing is one of them. So they put themselves right in front of the biggest customers.

And here's another example. Huawei began life as a reseller in the late 1980s, selling PBXs into a country which had almost no land lines. Huawei's first hardware in 1994 was a cloned PBX box. But while nicking a design may have worked then, today you need IP clout to be a big telco equipment provider. This is the "Patent Wall".

And a quick look in the car park:

There's a small area for bikes in the corner of a carpark dominated by European saloons and 4x4s - and the bikes are for shuttling between offices, or from the offices to the on-campus accomodation. Hardly anywhere in this great horizontal sprawl of modern Guangdong do you see bicycles - I saw one or two at night - it's built around cars and public transport. It's another way New China is "more like America than America".

And what does Shenzhen do for fun? Let's find out...

Shenzhen at play

Naturally there's a stunningly modern underground system - four track in parts - to get you around. All the announcements and signage are in English, as well as Mandarin.

The Western brands are all present - but Chinese sales duty means that prices are much higher here than a few miles away in Hong Kong. So every Saturday, some 100,000 mainlanders drive over the border for some serious shopping. But the electronics markets are thriving:

The gadget tourist will head for the Yuangwang district - a mind-boggling cluster of stores and stalls typical of a bustling Asian market, with hundreds of apparently idential outlets. We visited in 2012 and filed a special report.

New shops open up all the time - many of them Apple stores.

That's right. "Stores" plural. Here are a couple, right next to each other, at street level:

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The red-shirted assistant gently advised me "no photo" as I took a closer photo of the one on the left.

The wares on sale here are a mixture of genuine Apple stock smuggled over the border, refurbished kit (the refurbishment taking place over many floors of the market) and knockoffs.

Here's a girl assembling a fake Apple plug.

The goods on sale at UK prices are probably genuine, albeit probably not new. I picked up a fake Apple Earpod (UK price £25) for a pound. It worked first time. I dont' expect it to work a second time ...

Meizu is an interesting outfit: it began life making MP3 players, then iPhone and iPad clones. It became the biggest and most notorious cloner. Apple took out an injunction to stop it selling the clones, once Apple entered the Chinese market. Thanks to Android, it's been making its own designs - and will be making an Ubuntu phone, apparently.

Here's one of its high street stores, with cagey looking staff.

Shopping is the main leisure activity at night too - or at least, strolling around the vast night market is. Around the city, the authorities create new "leisure zones" hoping to draw in residents and visitors, this one being "OCT Bay Happy Mall" with an IMAX and dozens of restaurants. It's hoped cruise passengers who today dock at Macau, on the other side of the Delta, will stop here instead. A few hundred had turned up to watch a water works display.

As you can see, they've got everything covered:

With Hong Kong only a few miles away, it's hard to see the attraction for a visitor of staying more than a night in Shenzen. But for the mainlanders - who only twenty years ago were riding bicycles in the dark - this must be quite marvellous. ®