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story.lead_photo.caption Shoppers stand outside a Huawei store last month at a shopping mall in Beijing. Huawei Technologies Co. plans to shift its research center to Canada from the U.S.

BEIJING -- The founder of Huawei said the Chinese tech giant is moving its U.S. research center to Canada because of American sanctions on the company.

In an interview with Toronto's Globe and Mail newspaper, Ren Zhengfei said the move was necessary because Huawei would be blocked from interacting with U.S. employees.

Huawei Technologies Ltd. is the No. 2 global smartphone brand and the biggest maker of network gear for phone carriers. U.S. authorities say the company is a security risk, which Huawei denies, and announced curbs in May on its access to American components and technology.

President Donald Trump's administration announced a 90-day reprieve on some sales to Huawei. The government said that would apply to components and technology needed to support wireless networks in rural areas.

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In Canada, Huawei has added 300 employees this year, raising its total workforce north of the U.S. border to 1,200, Ren said. The company has reduced its U.S. workers by 600 to 250 after U.S. restrictions prevented its abilities to communicate with employees. A Huawei spokesman said the company had no further comment.

"The research and development center will move from the United States, and Canada will be the center," Ren said in a video excerpt of the interview on The Globe and Mail's website. "According to the U.S. ban, we couldn't communicate with, call, email or contact our own employees in the United States."

Ottawa should make the development of artificial intelligence its national strategy, Ren said. If the Canadian government needs capital to attract talent, "I can give them money. I am richer than the Canadian government."

Huawei, China's first global tech brand, is scrambling to preserve its business in the face of possible loss of access to U.S. components, which threatens to damage its smartphone business.

Huawei, based in the southern city of Shenzhen, also operates research and development centers in Germany, India, Sweden and Turkey.

Ren also wants to build new factory capacity in Europe that will be mostly automated to make 5G equipment as part of Huawei's plans to expand its global reach. He said the shift away from production in China may win more trust in Europe.

In November, Huawei started selling a folding smartphone, the Mate X, made without U.S.-supplied processor chips or Google apps. The company also has unveiled its own smartphone operating system it says can replace Google's Android if necessary.

Huawei's chief financial officer, Meng Wanzhou, the eldest daughter of Ren, was little known publicly until her arrest last December at Vancouver's airport at the behest of U.S. officials. The U.S. accuses Meng of tricking banks into conducting transactions that violated sanctions on Iran. In the latest developments surrounding her trial, lawyers for Meng have opposed the broadcast of her extradition proceedings in Canada, saying such a broadcast would raise the risk of the Trump administration muddying her case.

Information for this article was contributed by staff members of The Associated Press and by Divya Balji of Bloomberg News.

Business on 12/04/2019

Print Headline: Huawei moving U.S. center to Canada


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