Business
‘No one owns Huawei but its employees’
By Jiang Xisheng
Sweden’s telecom regulator, PTS, recently excluded the country’s operators from using Huawei equipment in their 5G networks, justifying the action by saying that any vendor based in China posed an automatic threat to Swedish national security.
Such misconceptions could prevent Swedish households and businesses from enjoying the benefits of Huawei’s innovation. Unfortunately, they are reinforced by the press. For example, an editorial column published in Dagens Industri on November 10 suggests, “China should open Huawei for foreign ownership” . This recommendation, while undoubtedly well-intentioned, displays a profound misunderstanding of how our company is structured and managed.
Huawei was founded in 1987, and I joined in Huawei in 1989. Back then banks were reluctant to lend money to small start-up companies. Huawei had to raise capital by selling shares to employees, an arrangement that continues to this day. Employees buy shares with their own money, and receive annual dividends based on the number of shares they hold. They also elect members to form a Representatives’ Commission on a one-vote-per-share basis. The Commission elects the company’s Board of Directors. Such a profit- and risk-sharing system provides Huawei with the funds it needs for long-term growth and lays the foundations for its governance and management.
Being privately held frees Huawei from the short-term pressures faced by publicly listed companies, whose shareholders expect them to meet quarterly earnings targets. Liberated from such external pressures, Huawei can maintain its long-term focus on research and development, while shareholding employees can reap higher rewards.
Currently, Huawei founder and CEO Ren Zhengfei holds about 1% stake of Huawei; the rest is held by Huawei’s union, the platform through which employees own the company. It is common and legitimate for companies in China to set up trade unions to serve as their shareholding platforms. Although the media likes to describe this arrangement as opaque, it is actually not so different from what one finds at employee-owned companies elsewhere in the world, including John Lewis Partnership (a department store group in the UK) and Essilor (a French-based international ophthalmic optics company).
In fact, our ownership structure is embraced by many Swedish companies today. Last year’s European company Survey, shows 11% of all companies in Sweden’s private sector have employee share ownership schemes – more than double the European average. Perhaps the model appeals to Sweden’s egalitarian sensibilities: Employees are paid differently based on the work they do, but there is a transparent profit-sharing mechanism in place. People feel empowered, care about the quality of their work, and continually think about ways to improve the business. Some European experts have concluded that Huawei is implementing “employee capitalism.”
Detractors allege that we became a global leader through government support. In fact, the company has succeeded for the opposite reason: we operate independently and follow the logic of business, not politics. From its inception in 1987 until the early 2000s, Huawei competed with Chinese state-owned enterprises, many of which later shrank to insignificance or disappeared completely. This result should not surprise capitalists, who understand that in most cases, state-owned or -controlled companies tend to lose their competitiveness due to bureaucracy and low efficiency. This is particularly true in the high-tech industry. Why has China’s tech industry developed so fast and so well? Perhaps in part because, since the 1980s, China has opened its market to, and provided a level playing field for, companies such as Ericsson, Nokia, Motorola, Siemens, and other foreign companies.
The PTS statement reminded me of China’s period of political turmoil in the 1960s and 1970s. Because my family were classified as landowners, I almost missed the chance to attend university. I hope the PTS can perform an objective, fair, and fact-based assessment, and make decisions that will benefit the whole of Sweden. Huawei’s door is always open for Swedish politicians, researchers, journalists, and others to visit company facilities and its Employee Stock Ownership Plan (ESOP) Room, and exchange ideas about the system the company has built over the past three decades.
In the meantime, the facts remain unchanged: No government entity dictates Huawei’s business or investment decisions, and no one owns Huawei but Huawei’s employees.
Jiang Xisheng is Chief Secretary of the Board at Huawei.
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SLT-Mobitel, the nation’s ICT and Telecommunications Service Provider recently partnered with Spotify, to mark their launch in Sri Lanka. Spotify is a paid premium music streaming app which allows subscribers to listen to music to their hearts content. Both, SLT-Mobitel Post-Paid and Pre-Paid customers will now be able to enjoy Spotify by activating a monthly recurring subscription or one-time subscription plan and access unlimited music streaming and downloading facilities.
The subscription charges will get added to the user’s customary billing, where payment will be deducted in real time. Starting from the payment date, the user will be able to access Spotify and download their favourite songs, for the next 30 days. Users who sign up for their first monthly subscription will receive an additional one month, courtesy of Spotify. The one-month subscription plan is not applicable with one-time subscription plans. SLT-Mobitel data rates, depending on the user’s respective broadband charges, will apply.
Spotify also has some exciting features that will provide SLT-Mobitel customers with the opportunity to listen to ad-free music, access millions of uninterrupted music under one platform, play any song they like, anywhere they go, and also be able to enjoy their music offline.
SLT-Mobitel customers can select their preferred premium package under four categories; Individual, Duo, Family, Student. Each category has recurring and non-recurring plans. After one month of free streaming, the package will activate once the offer period terminates. While both, the Individual and Student premiums are limited to one account user, the Duo package offers two accounts and the Family premium is accessible through six accounts. To view Spotify plans, users can log on to https://spoti.fi/3aLWvce
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by Sanath Nanayakkare
Anyone conversant with the elements of a political economy would know that Sri Lanka is using its ‘sovereign power’ to manage the different dynamics of the economy in a sustainable manner, Professor W. D Lakshman Governor of the Central Bank said on Wednesday.
“Some critics are saying that we adopt a so-called modern monetary theory. That’s not the case. In fact, Sri Lanka is using its sovereign power in a number of economic aspects to honour its external debt repayment commitments as well as to reduce its debt burden in the medium term as well as achieve resilient growth in the medium to long term, he said.
“We make policy decisions to boost our gross foreign reserves, meet our external debt servicing, to facilitate monetary expansion, to boost our GDP growth, to strengthen our current account balance and manage our domestic and external economic variables in a sustainable manner. This is not a modern monetary theory. This is an age-old tool used by central banks around the world when the circumstances demand it, he said.
“Certain trade-offs will be necessary when dealing with an economy which has a big fiscal gap to bridge. There are efforts to push Sri Lanka towards the IMF again which would in turn have influence on our policymaking. We have taken policy measures to stabilize the economy and we have adequate reserve levels to meet our debt repayments. Meanwhile, we are in negotiations with overseas central banks and multilateral agencies to further boost our reserve level and it would materialise within a matter of weeks,” he noted.
“One of the tools the Central Bank has introduced is in respect of repatriation of export proceeds into Sri Lanka and conversion of such proceeds into Sri Lankan rupees in order to strengthen the foreign exchange situation of the country,” he said.
The Governor made these remarks while delivering the keynote speech at a webinar organised by the Veemansa Initiative led by its Managing Director Luxman Siriwardene – the former Executive Director of Pathfinder Foundation.
The webinar revolved round the topic ‘External debt situation in Sri Lanka: Are we heading for a resolution or crisis?’
Professor Sirimal Abeyratne, Prof. Sumanasiri Liyanage, Dr. Nishan de Mel and Dr. Ravi Liyanage were the other speakers on the panel.
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By Hiran H.Senewiratne
CSE produced signs of a rebound yesterday with both indices closing positive, though turnover remained low. Central Bank Governor W.D Lakshman’s recent statement on managing foreign reserves gave some boost to the market yesterday, stock market analysts said.
The index experienced a zigzag movement within the early hours of trading; thereafter, it recorded a slight up-trend as it reached its intraday high of 7,439. Later, the market witnessed a down-trend at mid-day, followed by a sideways movement and closed at 7,372, gaining 43 points during the month of February, market sources said.
It is said the banking sector dominated turnover with a contribution of considerable parcel trades in Sampath Bank, Commercial Bank and HNB.
Further, the Commercial Bank’s impressive quarterly results during the recent turbulent period also built investor confidence. Commercial Bank was able to register a18 percent net interest income when other banks were reporting a decline. Its share price increased by Rs. 3 or 3.5 percent. On the previous day, its shares started trading at Rs. 85 and at the end of the day they moved up to Rs. 88. Due to the positive growth results, the bank announced a Rs. 4.40 dividend per share, plus a Rs. 2 script divergent for every share.
Further, Sampath Bank shares also appreciated in both crossing and retail. In crossings its shares appreciated by Rs. 1.At the end of the day they moved up to Rs. 154.50. In the retail market, its shares moved up by Rs. 2 or 1.3 percent. Previously, its shares fetched Rs. 154 and at the end of yesterday they moved up to Rs. 156.
Amid those developments, both indices moved upwards. The All Share Price Index went up by 104.48 points and S and P SL20 rose by 67.78 points. Turnover stood at Rs. 3 billion with four crossings. Those crossings were reported in Sampath Bank, where 3.9 million shares crossed for Rs. 602.2 million, its share price being Rs. 154.50, HNB 375,000 shares crossed for Rs. 39.4 million, its shares traded at Rs. 105, Pan Asia Power 9.5 million shares crossed for Rs. 33.2 million, its shares traded at Rs. 3.50 and Access Engineering 1.2 million shares crossed for Rs. 28.2 million; its shares traded at Rs. 24.
In the retail market top five companies that mainly contributed to the turnover were, Expolanka Rs. 450 million (10 million shares traded), JKH Rs. 205 million (1.3 million shares traded), Browns Investments Rs. 199 million (34.9 million shares traded), Sampath Bank Rs. 191 million (1.2 million shares traded) and Dipped Products Rs. 137.7 million (2.8 million shares traded). During the day 101 million share volumes changed hands in 18046 transactions.
During the day, Expolanka, the biggest contributor to the turnover, saw its share price appreciating by Rs. 6.20 or 15 percent. Its share price quoted on the previous day was Rs. 41 and at the end of trading yesterday it moved up to Rs. 47.
Sri Lanka’s rupee quoted wider at 193.50/195.50 levels to the US dollar in the spot next market on Thursday while bond yields remained unchanged, dealers said. The rupee last closed in the spot market at 194.50/195.00 to the dollar on Wednesday.
