Introduction
In recent years, the landscape surrounding high-tech technologies has changed dramatically within the economic sphere of Japan, the United States, and China. With the Chinese government tightening semiconductor regulations and the US restricting exports, traditional business models are increasingly becoming obsolete.
In this situation,Huawei TechnologiesThe astonishing resurgence of Chinese companies, often referred to as "the Chinese company that has recovered its sales and developed new businesses despite strict US sanctions," holds many valuable lessons. This article offers a deep examination of how Japanese companies should approach the future, drawing on the fact that these companies have recovered their sales and developed new businesses despite the US's stringent sanctions.
This article explains Huawei's strategic shift, using specific examples. It clearly explains key points such as "technology restrictions are no longer effective," "the importance of Plan B," and "the acceleration of de-USification." This content will be beneficial for those interested in business strategy and understanding the current economic situation.
Huawei's comeback: Overcoming US sanctions with "Plan B"
In 2019, the US government imposed full-scale export restrictions on Huawei. At that time, the company faced a significant drop in sales and business stagnation, but has since recovered through strategic responses.
Most notably, the company implemented its "Plan B." By quickly putting into action alternative plans it had prepared in the event of adversity and accelerating its entry into new businesses, it was able to overcome the crisis.
Specifically, we implemented the following measures:
- Revenue shift from consumer-oriented businesses such as smartphones
- Expanding the proportion of sales from five new businesses including automobiles, power, and cloud computing.
- Breaking away from technology heavily reliant on the United States and accelerating domestic production.
For the fiscal year ending December 2025, sales are projected to reach 880.9 billion yuan (approximately 20 trillion yen), an increase of 2.21 TP3T year-on-year, and net profit is projected to reach 68 billion yuan (approximately 1.6 trillion yen), an increase of approximately 8.71 TP3T year-on-year. This is nearly the same level as the fiscal year ending December 2020, before the sanctions were imposed. In particular, the automotive sector has seen sales increase nearly sixfold since entering the market in 2019 compared to the same period last year.
Details of the Fuwei Strategy: The Reality That Technology Regulations Don't Work
Huawei's resurgence offers an important lesson: that simple technology regulations don't work.
The main reasons are as follows:
Economic interdependence
- In the US-China and Japan-China economic blocs, it is realistically difficult to completely cut off the movement of people and the flow of capital.
- Restructuring supply chains is burdensome in the short term, but essential in the long term.
Accelerating domestic production
- Continued development investment in semiconductor design subsidiary Haisi Semiconductor
- In collaboration with SMIC (Semiconductor Manufacturing International Corporation), China's largest manufacturer, we have achieved 7-nanometer microfabrication.
- By developing its own OS, the company eliminated its dependence on the US-made Android OS for smartphones.
Human resource policy
- We will spare no effort in supporting Chinese engineers who have gained experience overseas to return to China.
- These individuals will be utilized for domestic production in the fields of AI and semiconductors.
As a result, contrary to U.S. expectations, Huawei has increased its sales while gradually reducing its dependence on the U.S. Although net profit for the fiscal year ending December 2024 was down 281 TP3T compared to the same period of the previous year, this is due to accelerated investment in research and development. This is an expenditure to maintain technological competitiveness and build a foundation for future growth.
Supplemental information and business strategies in the economic spheres of Japan, the United States, and China.
In the midst of the power struggle between China and the United States, what stance should Japanese companies take?
Key points:
Continuing business with China
- Given the economic interdependence, a complete break in relations is not realistic.
- While maintaining the Japan-U.S. alliance, Japan should follow U.S. strategy from an economic security perspective.
Balance in the high-tech sector
- In the AI and semiconductor sectors, it is necessary to follow the US export restrictions.
- A realistic analysis of the situation and the establishment of an agile response system are required.
Changes in management's attitude
- A survey by KPMG Consulting and Thomson Reuters found that more than 50% of companies have a department responsible for national security.
- A multifaceted strategy is needed, including the preparation of a "Plan B".
Furthermore, a US-China summit is expected to be held in April 2026. This could potentially lead to a relaxation of trade restrictions and other regulations. On the other hand, it is also possible that a president might take an unexpected move before the US midterm elections in November 2026. In such an unpredictable situation, a crucial management challenge is to build a system that can respond quickly to changing circumstances.
Summary
In today's business environment, the most important thing is the ability to cope with "unpredictability." The lesson we should learn from Huawei's success is not simply "enduring technological restrictions."
There are three important elements to consider as part of a business strategy:
- Firstly, "Preparing Plan B (alternative plan)"Therefore, it is important to have alternative strategies that can be used to respond immediately when circumstances change. Considering that companies with 50% or higher ranks have established security departments, Japanese companies should also establish a similar system.
- Secondly, "flexible entry into new businesses."Huawei has transformed its business structure by entering multiple new businesses, including automobiles and power, in addition to smartphones. Japanese companies should also explore areas where they can provide new value while leveraging their own core competencies.
- Thirdly, "Promoting the domestic production of technology"Reducing external dependence and fostering domestic competitiveness are essential for long-term stable management. In particular, in the semiconductor and AI fields, it is necessary to advance both domestic production and international cooperation.
In the business world, "change" is the norm. To succeed even in unpredictable situations, an organizational culture that always has alternatives and can act nimbly is necessary. Huawei's resurgence demonstrates the importance of not only overcoming the barrier of technology regulations but also transforming the business structure itself.
You might find it helpful to refer to today's articles in the Nikkei and Asahi newspapers. In light of changing economic conditions, I recommend reviewing your company's business model. The ability to adapt to change is the most important asset in these uncertain times.
