Tianjin – An autonomous crane at one of China’s busiest ports transfers cargo containers from a Japanese freighter to a self-driving truck as technicians in a remote control room watch on a monitor as tech giant Huawei destroys its smartphones amid U.S. sanctions Think of it as the future burns after the phone.
The backbone of the “smart terminal” at Tianjin Port, east of Beijing, is a data network built by Huawei, which is reinventing itself as a supplier of self-driving cars, factories and other industries, hoping they will not be influenced by Washington. The feud with Beijing over technology and security has festered.
The ruling Communist Party is pushing to automate industries from manufacturing to taxis to keep China’s economy growing as its workforce ages and begins to shrink. The “smart terminal,” part of Tianjin’s 200-square-kilometer (77-square-mile) port, will allow 200 employees to move as much cargo as 800 people used to move, its officials said.
“We believe this solution in Tianjin is the most advanced in the world,” said Yue Kun, chief technology officer of Huawei’s port business unit. “We believe it can be applied to other ports.”
Huawei Technologies Co Ltd, which makes smartphones and is the world’s largest supplier of network equipment to phone carriers, cut off access to U.S. processor chips and other products after then-President Donald Trump cut off access to U.S. processor chips and other products in 2019 amid a dispute with Beijing over security issues. After the technical visit, Huawei Technologies Co., Ltd. was in trouble.
Washington says Huawei is a security risk and could use its access to foreign phone networks to facilitate Chinese espionage, an allegation the company denies. The United States and allies including Japan and Australia have banned or restricted their phone carriers from using Huawei equipment.
Smartphone sales outside China plummeted after Huawei lost Alphabet Inc.’s Google’s music, maps and other services that buyers expect to see come pre-installed. Its low-end Honor brand was sold in 2020, hoping to revive sales by separating it from its parent company’s sanctions.
Huawei, which employs nearly 200,000 people, has maintained its status as a leading maker of networking equipment based on sales in China and other markets where Washington has been less successful in encouraging governments to shun the company.
Industry analyst Paul Budde said that “Huawei is already a key player in data networking” with “a wealth of knowledge”.
The company has built 20 teams, focusing on customers in industries such as factories, mines, hospitals, ports, and power plants. It said the auto unit had 3,000 employees working on autonomous driving and had invested $2 billion in the technology in 2020-21. Huawei was an early developer of “smart city” networks for traffic control and police monitoring.
“However, the biggest dark cloud here is geopolitics,” Bader said, “which will hinder its participation in overseas markets,” he said. “The problem is not technology, it’s purely political.”
U.S. pressure on Huawei reached an international standoff in 2018 after its founder’s daughter and chief financial officer, Meng Wanzhou, was arrested in Canada on U.S. charges of violating trade sanctions against Iran.
China has arrested two Canadians on espionage charges in an attempt to secure Meng Wanzhou’s release. They were released in September 2021 after Meng was allowed to return to China under an agreement with U.S. prosecutors in which she was held accountable for misrepresenting Huawei’s dealings with Iran.
Huawei says its new focus is already helping revive the company’s fortunes.
“In 2020, we have successfully emerged from crisis mode,” Xu Zhijun, one of the three Huawei executives serving as the rotating chairman, said in a letter to employees in December. “U.S. restrictions are now our new normal, and we’re back to business as usual.”
Last year’s revenue is expected to be little changed from 2021 at 636.9 billion yuan ($91.6 billion), Xu said. That’s lower than Huawei’s double-digit growth a decade ago, but an improvement from a 5.9 percent decline in the first half.
He didn’t break it down by line of business, but Huawei reported sales to industrial customers of 102.4 billion yuan ($16.1 billion) in 2021. Sales of smartphones and other devices fell 25.3% year-on-year to 101.3 billion yuan ($15 billion) in the first half of 2022.
The automotive unit, which provides components and software for navigation, dashboard displays and management vehicle systems, plays a role in five models launched by three Chinese automakers.
As the size of China’s working-age population aged 16 to 59 has declined since peaking in 2011, the ruling party’s push for automation has grown in urgency. This group has shrunk by about 5%. Its share of the population has slipped from 70% to 62%.
Yue said Tianjin port managers told Huawei they were already struggling to find and keep truck drivers.
“This helps to solve the problem of population aging,” Yue said.
Yue said Huawei had talked to “people outside China” who might use its port technology, but he gave no details.
The annual market for port-related networking technology is modest at $2 billion, but global sales of devices that connect factories and medical equipment, cars and other equipment total $600 billion a year, according to Budde. As long as foreign buyers are not put off by security concerns, that could replace Huawei’s lost smartphone and other telecom sales, he said.
Tianjin Port’s fleet consists of 88 battery-powered autonomous trucks that are charged by wind turbines, according to port spokesman Peng Pai.
“It’s safer and uses clean energy,” Peng said.
In the third-floor control room, with floor-to-ceiling windows overlooking the port, a dozen operators sit in front of monitors with as many as six screens showing computer-controlled cranes hoisting containers on and off the ship. Video input. Each crane can monitor up to six cranes at a time, unlike traditional operators who service only one vessel.
“People have to work on the cranes,” said Yang Jiemin, vice president of Tianjin Port Group. “Now, our operators can sit in the office and monitor the equipment remotely.”
Huawei’s Yue said that if the sensors indicated a problem, operators would take control of the crane or truck. The port aims to reduce the “takeover rate” to 0.1%, or one in a thousand containers, while computers manage the handling of other containers from start to finish, he said.
The high-speed network allows a crane or truck to respond to commands within 1/100th of a second, even if the vessel is 500 meters (one-third of a mile) away from the control room, said Liu Xiwang, manager of the port’s information department.
“You don’t feel the delay,” Liu said.
Yue, a Huawei executive, would not say whether it would need processor chips or other foreign imports that could be disrupted by U.S. sanctions.
“I really don’t know the answer to your question,” Yue said after being asked twice about the source of key components. He likens it to buying a cup of coffee: “I don’t know who provided the cup, the beans and the water.”
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