Given everything that has happened with Huawei, I wanted to something of a short point by point recap and fact check that also includes the current points of dispute. This is not intended to be deeply analytical but rather just try and recap the points and where positions have changed.

1. Donald Clarke and I release a paper entitled “Who Owns Huawei?” on April 17, 2019. We argue that despite their claims, Huawei is not employee owned but rather owned by the union. The union is under the umbrella of the All China Federation of Trade Unions a mass or public organization and therefore effectively state owned.
2. Huawei makes their first response to the paper saying “unreliable sources and speculations, without an understanding of all the facts. They have not verified the information in the report…”.
3. On April 25^th, Huawei holds a 90 minute press conference to dispute the key findings of the paper. Despite attempting to rebut the arguments, they in fact confirm most everything that is written in the original paper.
   1. Though continuing to refer to their shareholders, Huawei specifically says “Huawei employees are not registered shareholders as defined by law…”. In other words, employees do not own Huawei. The NYT describes them as “restricted phantom shares” quoting Huawei.
   2. Huawei acknowledges specifically that the trade union is owner of the company as we argue demonstrate in the paper backed by corporate records.
   3. In short, despite initially criticizing the paper for using “unreliable sources and speculations, without an understanding of all the facts”, in reality Huawei has acknowledged and conceded all major facts.
4. This does not mean Huawei agree with the conclusions though they yield the primary factual accuracy of the paper. Here are the key areas they dispute.
   1. Huawei continues to insist, though acknowledging the employees are not legal owners of the company, are in fact the effective owners referring to them as shareholders. Given there is no legal ownership of the company, they are not shareholders. Rather, as we argued in the paper, what Huawei is utilizing is a type of profit sharing plan. Employees must purchase their profit sharing rights and while the profit sharing rights are similar in many ways to a dividend that would accompany a stock, it is not a legal shareholding. Many companies establish profit sharing plans but that does not give employees a shareholding right.
   2. Huawei insists that though the union is the owner of the company, they argue that the union “It is not involved in any decisions connected to Huawei’s business and operations… and oversees activities such as badminton and hiking.” Others have built upon this noting that every company has Party committees that organize various team building or group activities. In short, their argument is that while yes the union is the owner of the company, the Communist Party Committees and company unions are more akin to social clubs than exercising actual control over workers and firms. Without delving into this dispute, I do not think it is accurate to say that unions or the Party in China are akin to social clubs that exercise little to no control over workers and firms other than organizing activities like badminton and hiking.
5. There are a few remaining issues I would like to cover here given that there is some confusion or dispute on these points.
   1. All unions in China are under the umbrella of the All China Federation of Trade Unions and all companies with more than 25 employees are required by law to have unions. Each union, at any level is responsible to the union organization above it. This upward relationship exists all the way so that every union in China is technically a member of the All China Federation of Trade Unions and responsible to its head. This is not an interpretation, this is clear Chinese law in the law on trade unions. Huawei even acknowledges this stating that “Huawei pays a portion of its compensation package to Shenzhen’s Federation of Trade Unions via Huawei’s own Union. Huawei’s Union is registered under Shenzhen’s Federation of Trade Unions.”
   2. Huawei has argued that this is a non-story because other companies have at times used similar structures. We never claimed this was an entirely unique structure. Our primary claim is that Huawei is not telling the truth by saying they are employee owned private company. Admitting they are union owned directly means they are owned by a mass/public organization under the ACFTU and not an employee owned private enterprise. We do not dispute that other companies use a similar structure or that some unions own various financial assets depending on their needs.
   3. As has been pointed out, the research is both helpful in determining the facts but does not address the issue of who actually controls Huawei. I agree with this general sentiment but note primarily that it is important to establish factually who owns Huawei. Without delving deeply into the question of control, given the weight of evidence that we know about modern China in 2019, it belies any credibility to argue that the CCP and union act only to organize badminton tournaments for staff.

I believe we have quite credibly demonstrated that our analysis of Huawei ownership is both correct as a matter of fact and as a matter of law. Huawei has not only changed positions but as conceded we are correct as a matter of fact and law insisting now that the national trade union only organizes hiking excursions.

I can guarantee there is more to come but I wanted to establish where the matter currently stands.