Why Huawei lost deals in America

Huawei failed to buy US server firm 3leaf system following objections from US politicians and regulators. This is the second big failure Huawei experienced in acquiring an American company. The Chinese company should do a better job of understanding America’s political climate, its investment-review system, and how to navigate both successfully.

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But that is not easy. First, Chinese company is an outsider in the lobby system. In America, lobbyist is a legal existence who tries to influence legislation on behalf of a special interest, such as business organization. In China, there is no such legal public connection between government and companies. Therefore, any public meeting between company and government officer should follow specific regulation, it is difficult to get special interest outside the existing government policy. Regarding private talk between company and government officer, company should act carefully, because any of these could be easily read as bribery. Under the circumstances, Chinese companies hesitated to throw a large amount of money into lobbying groups, could not get US lawmakers’ support.

Secondly, most Chinese immigrants are scientific or technologic elite, they have no stomach for political arena. Thus, preeminent political agents who understand Chinese culture tradition and mode of expression are hard to be found. Therefore, without local political propaganda, American’s media and ordinary people will not change their hostilities against Chinese value system, and don’t want American’s company to be bought by a Chinese company.

Huawei needs to find an appropriate local surrogate to prepare for the later takeover case.