With an initial registered capital of 21,000 RMB (about US $6,000), Huawei started its business by manufacturing private branch exchange switches (PBX) (Nakai, Tanaka 2). However, only by 1992, Huawei had dominated the mainstream domestic market by heavily investing in research and development. With the initial accumulation of capital, Ren Zhengfei, the founder of Huawei, decided to expand abroad for further development. Ren said: “When domestic markets will eventually get saturated, Huawei will die unless we can build an international team in three to five years. (Ahrens 7)” Driven by the intention of larger market access, Ren decided to follow Mao Zedong’s famous philosophy: encircle the cities by winning the countryside. In this...
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