Did China's Huawei Chief Reveal Too Much?

BEIJING ( TheStreet) -- A Chinese executive often painted by Washington as a sinister Communist may have given his critics more fodder with an essay that's peppered with military references and compares his company to the tortoise who won the race.

Huawei Technologies' chief executive and founder Ren Zhengfei did not say identify the "hare" of his Aesop's Fables analogy, which appears as a "Letter from the CEO" essay with the company's 2013 financial report released this week.

But Ren may have had America in mind. He wrote in the rambling, 4,100-word essay that "surpassing U.S. companies and enjoying the ride" is a goal for the company, which is already the world's largest telecom equipment maker and is expanding into smartphones.

For years Huawei  has been effectively barred from American markets by U.S. lawmakers who fear the company's gear could be used for spying. Critics note that Ren is a former People's Liberation Army officer.

Ren's Chinese military past apparently inspired a proposal cited in his essay to create a new management scheme based on "major general company commanders."

He also wrote, "Pyramid-styled management was right for mechanized warfare in the past, in which the cannon shot was near and communications systems not advanced.... In modern warfare, however, because powerful long-range weaponry is available, operations are carried out using satellites, broadband, Big Data, missiles, airplanes, aircraft carriers, and a lot more."

Privately held Huawei, which reported a 34% jump in year-on-year net profits in 2013 to US3.47 billion, competes globally except in a few countries including the United States and Australia against Sweden's Ericsson (ERIC), Cisco (CSCO) and Alcatel-Lucent (ALU).

Huawei also runs a fast-growing smartphone unit that's challenging Samsung (SSNLF), Nokia (NOK), Apple (AAPL) and other handheld makers around the world.

On course to beat the hare, Huawei announced this week plans to double sales revenue to $70 billion by 2018. It reported $39.5 billion in sales last year, up 8.5% from 2012.

Ren praised the "tens of thousands" of Huawei employees who "left behind home and family" in China to build telecom networks "from the high plateaus of Bolivia to the lowlands of the Dead Sea, and from the boundless tropical rainforests to the scorching deserts." He said in this way the company, like a tortoise, has "crawled along."

At other telecom firms "many people have become rich, riding on the rising economy over the last two decades," he wrote. "We are still on our journey of hard work and dedication."

At the time of publication, the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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