Huawei in Venezuela: a review of 2006–2019

Abstract

PurposeThe aim of this article is to describe Huawei's internationalization process in Venezuela and show how socio-political and economic conditions helped to expedite the company's development in this Latin American nation between 2006 and 2019. Through this internationalization process, Huawei participated in a large technological transition in Venezuelan telecommunications.Design/methodology/approachThis research uses an integrative approach, developing a quasi-case study from a review of the academic literature, contemporary news stories and institutional and practitioner documents.FindingsThe review indicates that Huawei was engaged in business with the Venezuelan phone company before its renationalization. Secondly, Huawei's internationalization was a beneficiary of the increased relations between the Venezuelan and Chinese governments, mainly through “oil for loans/goods” agreements. Lastly, this internationalization process includes wholly owned subsidiaries, direct export, greenfield and government joint ventures.Practical implicationsThis research provides an understanding to other firms and strategists about the benefits of strong bilateral economic relationships between home and host countries.Originality/valueThis paper is among the first academic articles that describe the internationalization process of Huawei in Venezuela. Considering the host country's changing political and economic conditions during the last 20 years, such research may provide a perspective for considering other Chinese business expansions in Venezuela and Latin America.

The Impact of Bilateral Relations on Chinese Multinational Enterprises' Investment in Latin America

“…They committed to building a new five-dimensional framework for China-Latin America relations, characterized by sincere mutual trust in politics, win-win cooperation in economy and trade, mutual learning in culture and education, close coordination in international affairs, and mutual promotion between overall cooperation and bilateral relations. 2 Based on this, China-Latin America relations in the new era have shown four major characteristics: deepening of political and strategic mutual trust, leapfrog development of pragmatic cooperation, active promotion of overall cooperation, and rich and diverse cultural exchanges. 3 Firstly, political and strategic mutual trust between China and Latin America America have established a new pattern of "Five-in-One" cooperation and a pragmatic cooperation framework of "1+3+6," which consists of "One Plan" and covers three engines of trade, investment, and financial cooperation, as well as six key areas: energy resources, infrastructure construction, agriculture, manufacturing, technological innovation, and information technology.…”

“…Huawei's business in Venezuela directly or indirectly benefits from the strong economic ties developed between China and Venezuela over the past two decades. 16 Starting in 2007, Venezuela and China established a series of bilateral development funds, including the China-Venezuela Joint Fund (CVJF), known as "Fondo Chino" in Spanish. 17 These intergovernmental funds serve as a financial source for Venezuela's technology, infrastructure, satellite, technical assistance, mining, energy, and development projects.…”