All this suits the Chinese Communist Party well. Xi Jinping, China’s leader, has expressed the same ambition as the company, to overcome American sanctions with locally developed technology. The state, already Huawei’s biggest customer, also supports it in other ways. To spur the development of the semiconductor industry, it provides subsidies and invests alongside Huawei. The company and the government both own stakes in Focuslight, Everbright Photonics and Xuzhou B&C Chemical, for instance.
But Huawei’s relationship with the state is often misunderstood. The firm is not trying to indigenise its supply chain to comply with government directives. Rather, for Huawei and many other Chinese companies, self-sufficiency has become a commercial imperative because it is their only means of survival. Its investment decisions are market driven. This separates it from sluggish state-owned enterprises, which formulate their business plans based solely on state policy.
They don't even bother to add paragraphs between their contradictions anymore.