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Huawei and Telefunken: Communications enterprises and rising power strategies

By Rick Umback

This Strategic Insight, examines Huawei through a historical lens. It identifies strong parallels between the industrial policy adopted by Germany in the early twentieth century to cultivate a ‘national champion’ in communications – Telefunken – and the Chinese party-state’s support for Huawei since its formation in 1987.

It demonstrates that Huawei and Telefunken both benefitted from guaranteed government orders for their hardware, protected domestic markets, long-term backing from national financial institutions, and diplomatic support for overseas expansion. These policies increased the firm’s competitiveness on the world market, facilitating the development of national capacity in advanced communications. The development of capacity in communications brings strategic benefits for a rising power – allowing it to escape dependence on the outside world for vital infrastructure, build capabilities with potential military applications, and build geostrategic influence in key regions.