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ZTE's international executives tell you the truth and strategy of sanctions against ZTE.

via:博客园     time:2018/4/20 19:03:29     readed:305

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Wen / Wang Tao

Source: pure science (ID:chunkexue)

This article starts with the surging news

In April 16, 2018, the U. S. Department of Commerce announced that the ban on components, goods, software and technology of ZTE is prohibited by US companies. The ban will be valid for up to seven years. Seeing this news, like almost all Chinese, my first reaction was that it was a new progress in the Sino US trade war, and that Trump turned from a full attack to a key attack. But after reading the documents and related materials of the US Department of Commerce, my mood was extremely painful: things are not so simple.

It's a trade war and a case

What is a trade war? To put it simply, your industry is developing too fast and well, I can't rely on normal market competition, only through tariff and other means to compete. So, if you look at the trade war list that was published between China and the United States some time ago, it's purely based on trade.

The other scenario is not a total trade war, but a bit of a rule, no longer just an unprovoked explosion of a large chunk, but a case-to-case strike such as intellectual property litigation and anti-dumping This may have a certain international impact on the political side. The scope of anti-dumping at a certain time may be larger, but sometimes it will appear.

The last case is purely a case where individual firms suffer setbacks in their international trade.

Now let's take a look at what the nature of Zhongxing's punishment belongs to. As an outstanding Chinese high-tech enterprise, ZTE is indeed the focus of the US trade war. Therefore, it is unrealistic to say that it is not affected. But suppose there is no trade war, will there be any accident in ZTE? It's a pity that it's going to be an accident.

Since ZTE itself was far away from the trade war, even in the beginning of the first 2012 case, the Chinese did not know who Trump was. At that time, the president of the United States was Obama. In March 7, 2016, the Department of Commerce of the United States officially announced that ZTE violated the laws and regulations related to us export control. Trump was still fighting with Hilary instead of trading with China.

In March 7, 2017 after Trump had been in office, ZTE was fined for $892 million 360 thousand, punished 39 people, and paid $300 million to the Department of Commerce and safety of the United States Department of Commerce as a reprieve (whether the final payment was determined by the agreement of the next seven years) and the US business. The Department reached a settlement.

Judging from this result, the matter has already been settled, and the United States Department of Commerce really does not.

And the United States made a decision on the total ban on ZTE, on the grounds that 4 of the 39 people who had been punished did resign, but the bonuses of 35 people were paid in full.

In accordance with the settlement agreement reached between ZTE and the US Department of Commerce, assuming that the US side's statement this time that the punishment given by ZTE to 35 related personnel has not actually been carried out is true. The corresponding measure should be to continue to enforce all or part of the $300 million in the settlement. As a result, the US Department of Commerce has imposed a total ban on the sale of ZTE, which clearly belongs to

Almost all Chinese instinctively believe that the United States is

When I was deputy general manager of ZTE's fourth marketing department in 2004, the international market of ZTE and HUAWEI could be said to be all in a mess. How bad is it? The recruited salesman went to a country and rented a villa for a year and did not know what to do at all, and then returned home for more than half a year. I have constantly summed up the lessons and established the international market management system of the ZTE system, including the basic rules for the establishment of overseas offices, the staffing of the personnel, how to write the bids and so on. Since then, ZTE's international market development has entered a relatively normal way. HUAWEI was also normal after the international market development.

But unfortunately, until today, ZTE still does not really enter the state of self development with the fifth level according to the maturity model. Therefore, the overall ban on ZTE is a bit unfair, but the best case is that the $300 million reprieve of fines is very fast.

If you do not understand these, let me take a few past cases to give you an intuitive feeling. In this way, we can understand what is the real root cause of this ZTE incident.

It is a case and a common problem.

The instinctive way of thinking of most Chinese is to do it first, and then solve it again and again. There is also a strong reason for doing so

Any way of thinking can not absolutely say right or wrong, this first try, then correct the train of thought in certain circumstances is a great benefit, and even in many cases very conducive to innovation. The Internet, as well as the low-end industries, have benefited so much from doing so that they have even been dubbed

But unfortunately, in the international market and the development of chip technology, the trial and error way of thinking is fatal. The basic mode of scientific innovation is to consider problems based on the measured data of the original system and strictly logical thinking, and do things in the system planning. The international market and chip are the areas that require strict scientific thinking. In this field, the Chinese people's way of thinking has huge fundamental defects.

The chip's difficulty is not to say how hard the logic of the chip itself is, but the trial and error cost of the chip development is extremely high, especially when you are wrong to find it right there. As a result, chip developers must have strong logical thinking and reasoning ability, and do things right at the same time with strict logical thinking. If there are design flaws, we can only rely on very little measurement information to judge where the defects are by logical reasoning. In addition, the development speed of chip technology is the highest among all technologies. The famous Moore's law expresses the integration of chips in 18 months. If you want to invest in an integrated circuit project, you must take into account the speed of technological progress. The investment of integrated circuits is very huge, and the investment cycle is not much different from other industries. If you are in the automotive industry, you will evaluate according to the current level of technology. Even if the project is put into operation in 5 or 6 years, the technology level will not be very large. In the chip industry, 6 years is 4 Moore cycles, and the difference of integration is 16 times. This requires that the whole industry, from policy makers and industry leaders, must rely entirely on logical reasoning and thinking to conceive of a technical level of 16 times the gap that is not present at all. This is completely beyond the general way of thinking of the Chinese.

International market development is also similar. The situation in different countries is very different. Even in many cases, the opposite is true with China. Without sufficient research and systematic planning and design, the cost of the trial and error is not only extremely high, even more wrong or even unforgettable. A lot of Chinese and even experts are there to discuss the lessons, but they have not been in touch with them at all. It is far from clear what the problem is.

In 2002, I began to take charge of the international market of our department in ZTE, and I went abroad for the first time to go to South America. ZTE had been doing more than 5 years of international marketing in South America, but there was no order. I find it strange that the Chinese staff, especially the local staff, know why.

The reasons they give are consistent, and it seems very simple: if you want to get operator orders in Brazil, you must have factories in the local area. I ask why, they say this is the practice of local operators. They do not think they can provide local service capability without local factories. I asked two questions, one is why not transmit this information to the company, and the two is how much it costs to build a factory. They say they have told the company countless times, but the people in the company don't understand: you don't have an order. Why do you need to set up factories? The minimum cost of opening a factory is $200 thousand, while the Brazil office's annual operating cost is $200 thousand.

The office will spend 200 thousand dollars a year, the company can understand, so the annual flower out of the order is accepted, but why does it take 200 thousand dollars to open a factory to get the order? It is because we do not understand that we have to see rabbits before we can hawk hawks. However, 5 years, there is no order. Is the $1 million office cost not wasted?

I was in charge of this business. There is a transmission product, tested at a multinational telecom giant, and through full communication with customers and office workers, I find a surprising fact that no matter what it is, it can't have any fruit in the customer.

Because this international telecom operator adopts the short list bidding system, every 5 years will choose new product technology for short list bidding. If you enter the short list, the new market opportunities for this technology will be closed from then on, no more tendering within 5 years, only to the short list of suppliers in accordance with the original business and service conditions, which is not China's annual bid.

At that time, the transmission technology products, people have already completed the short list bidding, the market has long been closed. You know what the result is, so what are you still spending money on? To play, you also need to play a brand new technology and product that may invite short list bidding in the future.

After returning from South America, I wrote a report of more than 100 thousand words to summarize the problem.

To this day, however, ZTE still does not fully recognize what is called

Is ZTE caught in a little braid?

ZTE was caught in the brink of the US Commerce Department. Is it wrong? It is not only wrong, but also absolute and affirmative. Why?

Before I left ZTE, I summed up all of ZTE's marketing experience and all the classics of marketing into a book called "Marketing and Strategy," which was then written by Shi Lirong, director of the marketing system. As ZTE management system training materials. In particular, what ZTE lacks is Jack, the American marketing strategist.

It's always to be clear that the biggest enemy of ZTE is not a congressman who has been investigating and inquiries in the past, not the U. S. commerce department, nor the present Trump, but always his domestic and foreign friends. If ZTE does not want to realize this, friends will try every means to make it realize.

Not long ago, friends at the highest level were seen to be fined millions of dollars. I was very puzzled at the time. What mistake did I make to punish this? I didn't see it for a half day. When ZTE was banned, it was because 35 people were not punished, and my doubts were lifted immediately.

In January 31, 2018, ZTE announced that it was targeted to issue 13 billion in order to develop 5G, and was approved by the SFC in April 10th. There is no doubt that if the resurgence of ZTE's success were successful, the cash flow which was previously short of $900 million fine would become very abundant. Of course, foreign businessmen, of course, do not regret it. ZTE was fined less than 6 billion yuan, and it quickly raised 13 billion more from the market. There are obvious loopholes. How can you get such a cheap price?

Many people don't understand that in 2006 I was in charge of the India market for $600 million in sales, accounting for 1/7 of the 4 billion dollar sales of ZTE in the year. Why did I leave the company when the performance of India was so good? Of course, a lot of things are entangled in the heart, the profound crisis which is difficult to say, though I am very worried, but can not clearly say, finally can only look up to the sky sigh. Many of the marketing materials I left to ZTE may not be seen at all. If they see enough, I believe that today is not going to be so miserable. You don't know how to lose. How do you sum up your lesson and deal with it?

Last year, ZTE executives asked me to talk to me. I soon said that although I had been away from Chung Hsing for a long time, I was always willing to play a role in helping my old family whenever needed. But somehow, the matter has not been cleared up. I have reminded myself, but there is nothing below.

The vast majority of people are far away. The view of the Zhongxing compliance department is that it has been proposed earlier, but not adopted by the company; in view of the importance of the compliance department, it is necessary to establish a path to the top decision level of the company. After watching this, I wish I could give the boys a good meal. When it's all over, it's just trying to fight for power for its own departments, not all sectors of the people first think about what they have done wrong. If ZTE is really down, the top floor is not there. Where do you go directly?

Competition is a big team's behavior

The lawsuit between ZTE and the United States is not the first time. The first lawsuit should be said to be my handling.

I was in charge of the market for the video product line at that time. P, an American video company, found an American lawyer, sent to ZTE's US branch and company headquarters a lawyer, saying that ZTE's 4010 video terminal violated the company's patent. The lawyer's letter is very tough and requires ZTE to distribute the number of infringing products and inventory data to them.

Encounter this kind of thing, of course some headache and annoyance. I went to the legal department of the company, and the other side gave the opinion that, after investigating the relevant patents and laws, we should say that there was no infringement, because the appearance of our products was obviously different from the appearance of the products of company P. And the appearance patent this kind of thing has the quite big ambiguity, but also does not necessarily. This is equivalent to saying nothing. The advice they gave was

Several times the lawyer letter back and forth, although ZTE's letter writing level is really high, but the matter is endless annoying people, the old dragging is not the way. Maybe the other party is going to upset your market steps in this way. Obviously, lawyers alone can't find a real solution. The other side can not say for sure that our product is absolutely not infringing, nor is it certain that we are infringing.

First of all, you have to figure out what the matter is and what evidence the other party has grasped so that a truly effective solution can be found. I studied it for a long time, and finally I finished reasoning. The thing is this: P is in fact ZTE helping import the Chinese market through the OEM. The first 4010 series of products were printed on the publicity materials of P company's products. But then ZTE developed its own terminal products. For the continuity of the market, the product model was still called 4010. Its appearance can not be said a little bit of not learning the products of others, but to say that infringement of the appearance of P company's product patent, and indeed some of the hard work of our own developers.

So I came up with a bold strategy. The other side is looking for a lawyer's office to do this, and the lawyer's office does not necessarily know the whole story. So I designed this strategy: a direct letter to the Beijing branch of P and the headquarters of the P company in the United States, saying that we recently received a series of lawyers' letters from an American lawyer, saying that our 4010 product infringed P's patents, but 4010 was the product of our partnership with P itself. That is, how can we claim patent infringement if we get the products authorized by your company? The other party didn't know what our cooperation with P was, so we suspect that the lawyer's office is a fraud gang. I would like to inform you of this matter and thank you for your long-term friendly and pleasant cooperation.

The lawyer ZTE sent a letter in accordance with this plan, and took all the letters from both sides in front of us, saying that P company had no idea that the matter was distributed to each other. I believe that my strategy is totally beyond the expectations of the other side, but it is reasonable to let the other side thoroughly dizzy. It has never been received from the lawyer's letter.

Can you come up with such a strategy without the support of the law? Of course not. But the legal department alone? Of course not. That's why it's called

This is a complete ban on the sale of ZTE. If only the event itself is concerned, it is very simple: a high degree of procedural thinking must be needed to deal with the procedural market; what is done before and what it will be said will not be said. Since all the things have been fixed, the 4 senior officials have resigned, because the 35 people's bonuses and penalties have allowed ZTE to fall into a near doom, and the compliance department has made a clear warning in advance. Any competition in the market is comprehensive and systematic. There must be a cross professional team to cooperate with each other. The lack of cross disciplinary and interdisciplinary cooperation is the biggest weakness of Chinese companies, even Chinese talents and Chinese education. This is not a Chinese problem, but a problem of Chinese education.

Today, more and more important problems we encounter in practical activities are increasingly interdisciplinary and interdisciplinary. For this important problem, I think the whole Chinese technology and education system does not understand what knowledge system should be provided to solve it. The United States is the most typical representative of Western science and culture. If we can't understand what science is, and today's trend of interdisciplinary innovation, we can not systematically understand what American way of thinking is. If you do not understand your opponent, you will not know who you are. The so-called industrial upgrading and innovation can only be a dream.

If the problem itself is interdisciplinary, and you only consider it from a purely professional point of view, you will inevitably suffer from high-dimensional attacks that you do not know how to fight back. Conversely, if you can have a stronger interdisciplinary ability, you can carry out dimension reduction attacks on your opponent.

From TD to communication chip

When I was in ZTE, I was not responsible for the R & D of mobile products, but I had long been trying hard to give my full intervention to the TD field. I was in charge of the India market as Li Jinliang and so on.

Why do I have to push ZTE into the TD field? I discussed in detail in the ten thousand words book I gave to ZTE. Of course, there are many reasons, but the most important are two. One is that ZTE has a great market opportunity in the TD field because of its differentiation, and the other is that Chinese companies need to master the core chips sooner or later to establish a strong market position. In general, communication technology driven by Western companies is very difficult for us to have a full grasp of the chip R & D, but there are a large number of new chip R & D opportunities in TD technology. This is one of the main expectations of many TD leaders such as Li Jinliang and I.

Despite a lot of misunderstandings, the fact that HUAWEI is now able to make progress on cellphone chips, such as Kirin, is inextricably linked to a professional communication chip company born from TD's development to a number of outstanding chip talents. This is a very rare opportunity for the China Communications Corp to master the core chip in an all-round way, but it is a pity that this opportunity has not been fully utilized by ZTE. ZTE was satisfied with the money earned by TD equipment, and did not realize that this is a major opportunity to fully intervene in the chip area.

If you want to develop chips in the standard communications technology, you will inevitably encounter problems with American suppliers, while developing chips in a field like TD will not have this problem. HUAWEI can now have a unicorn chip, not that it started with a cell phone chip, but the HUAWEI flag company Hester has quietly accumulated over a number of years by the set-top box chip, and recently there is a breakthrough on the mobile chip. The chance of TD products is caught by ZTE, but the chip development opportunity brought by it has been missed. What a pity! I know well that I was trying to push the TD product in ZTE, which has made many people think it was too far, and it would be thought to be pulled out of the chip based on it.

Why do we have to wait until a major disaster can be identified? Why are there so many simple principles that can be understood through scientific thinking and reasoning, and must be used to do teaching materials with painful and unbearable practical lessons? Even if it comes to this point, it still doesn't understand?

Is the security problem so complicated? It's really simple

In fact, ZTE and HUAWEI were investigated by the US government many years ago because of security problems. At that time, I had left ZTE and saw the TV cameras of ZTE and HUAWEI executives receiving questioning in the US Congress. It was really humiliating and helpless.

A few years ago, because of the failure of a car's brake system, the death of a US customer family, Toyota Auto Body Co executives were questioned by members of the US Congress. When an economist talked about the incident, it was not a necessary legal procedure to accept a parliamentarians' inquiry in the United States. Members only took the opportunity to pull the parties into Congress and let themselves have a chance to perform. As long as there was such a matter, the American media was highly concerned. Free publicity. So, you have to accept the question itself means that you lose.

Of course, sometimes things can't be avoided if you want to. What if you have to go and have to be questioned? Look at people.

If I came to make a strategy when ZTE HUAWEI went to inquiries, I would let the members of the inquiries dare not take part in the election again, not what they asked, and the people of your ZTE HUAWEI were just passively answering what. If you want to accuse a Chinese company of any sin, you must give evidence in accordance with the law, not the presumption of guilt, and let me take the evidence. Logically speaking, it is impossible for scientific evidence to prove that a thing that does not exist at all.

Not to use basic legal knowledge, basic logic principles, the strength of its own communication profession, the law of philosophy of science, the history of the development of the United States and the United States, the correct views on security, and so on. It's a good chance to lose. Members only speak, and you speak more than they do. If you play American congressmen as monkeys, the American media will make you a hero and let them never dare to touch you again. If you don't understand the psychology and rules of American society, you will only be played by others. Is this correct strategy conceived in line with the laws of the United States likely to be understood in Chinese population?

Unfortunately, it may not be understood, because the Chinese, including those who have done it for a long time in the United States but do not go deep into the most profound laws of the American society, do not understand. At all, we do not understand the basic rules of the different countries in the international market, but they think it can be tried and wrong, and the problem is temporarily corrected. This is more fatal.

Security issues are not only in the United States, but also in many countries such as India. When I started dealing with the India market project in 2002, I had a security problem, almost every year, but every year I took things out in accordance with its own rules. As soon as I left ZTE, no two years India's security problem became a big case. ZTE and HUAWEI were almost banned from doing market in India for more than a year, and the two company lost up to $about 2000000000.

India's security issues are the responsibility of two departments. The first is the FIPB (Foreign Investment Promotion Committee) set up by the Reserve Bank of India (the Reserve Bank of India). Incredible, huh? How could such a sector be located in India's central bank? That's amazing. That's right. In my previous discussion of India, I proposed a

Do the staff of these two organizations really hate China and Chinese companies? Tell you absolutely not. They are only official, and they are doing business. If someone is going to tell them, they are handled according to the procedure. No one told them that they would never take the initiative to stir up trouble. Who's going to tell? Is it the so-called hawkish figure in India? It's absolutely not. Even the vast majority of ordinary Indians can't even figure out such a procedure.

In addition to the Western business, what other people will have to do? India customers do not want Chinese companies to be implicated in such matters, or even willing to testify for Chinese companies. The reason is simple. Chinese companies can provide them with cheap and quality products, help them reduce costs and provide better services. But a large number of the Chinese general public can not find out what the facts are. Instead, they yell on the Internet. It is about the Sino Indian War in 1962, as if we knew more about the history of China and India. There is a ghost relationship between them, that is a procedure.

If someone tells the relevant department that you have a security problem, you will submit the relevant information to these departments according to the procedure, and take the procedure to remove the accusation. It is so simple. If you can clearly understand that this is a procedure, the problem is very simple. Why did I never encounter safety problems when I was in charge of India Zhongxing market? In fact, people go to the relevant departments of India every year, but I do deal with them every year.

Is it ridiculous? Each year is the same product technology. Every year, the defendant has safety problems. Last year, the program finished, said there is no security problem, how second years to follow, say there is a security problem, and then the same procedure again to go again? What is a program? It will make the Chinese feel that it is foolish to do something clearly. Can't you go? If you don't take this stupid procedure, you will soon be dumbfounded.

The difficult is not, the meeting is not difficult.

Is there a solution to the event of ZTE?

ZTE's problems are really troublesome, but as many networks have said from the media, it will eventually become a big problem. Is it likely that ZTE is likely to decline? It is possible. But from a scientific point of view, the way to solve the problem is the same: no matter what it is, to study the problem itself, and to consider the problem in a higher dimension than the opponent, you can find a solution to the dimension reduction attack.

Is there a concrete solution? Of course not. Unfortunately, had ZTE's top management finally talked to me last year, I might have settled the matter ahead of time. I can't say I'm absolutely sure of the way things are going, but the real solution can't be said publicly. ZTE leader originally offered to see me, but I do not know what reason, what can I do? It should not have been this way to speak openly, like a showbiz. But...

If ZTE is willing to let me help, I can make a public promise not to mention any conditions but to help the elderly.

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