Inside Huawei's strategy room, the tension hadn't lifted.
One executive frowned.
"Can we even apply for support like that? Even if we did, I doubt we'd get it."
Old Master Ren agreed—it didn't make sense. But after learning more from Director Wang Cheng, it became clear:
Audi Auto Manufacturing, the subsidiary under China Star, had already developed a next-gen engine that left foreign brands ten years behind.
Ren smiled knowingly.
"It'll be approved next year. Just watch."
Xu Wenwei interjected.
"President Ren, with all due respect, that Audi Auto company doesn't seem that advanced.
It used to be a parts supplier."
He hadn't dug very deep. The subsidiaries all looked basic—no standout IP or assets. He assumed the real tech was from the labs and didn't investigate further.
Ren shook his head.
"Don't underestimate them.
Audi Auto is precisely what China Star uses to apply for loans and land from MIIT."
Then, as he sipped tea, Ren dropped something unexpected.
"You know what's interesting?"
"Lu Haifeng modeled his equity incentive system after ours at Huawei—only with a few twists.
And in some ways, he's taken it even further."
Inside China Star's Aggressive Control Model
Lab staff and management don't hold tangible equity
They only receive virtual shares and dividend rights
100% of actual equity remains with Haifeng
Haifeng holds veto rights and uses same-share-different-rights arrangements.
"He turned Huaxing Technology into a funding shell," Ren said.
"The real engine is the labs."
That setup lets him:
Maintain absolute control
Avoid external interference
Share profits generously with contributors
Still retain full ownership and voting power
Ren's tone turned appreciative.
"This is a good thing."
"We shouldn't see him as competition.
It means we're not fighting alone anymore."
"If more labs like China Star existed, this country would rise faster."
Huawei's structure has always been a global outlier.
Tens of thousands of internal shareholders. Almost no foreign ownership.
And deliberately avoiding IPOs.
"Huawei can't go public," Ren said.
"We never even considered it."
But with China Star?
"Their system is like ours—but more aggressive.
That's why top talent is joining them in droves."
"They're sharing real value—not fake titles."
How China Star Keeps Top Talent
The key?
Virtual equity
Massive bonuses
Dividends for real contributors
Internal committees control allocation—not external investors
All share allocations were handled by:
Employee Committee – for standard staff
Lab No. 2's Technical Committee – for R&D talent
"You want top minds to dedicate their lives to your company?" Ren said.
"You pay them like it's their company."
"Otherwise, talk of 'shared ideals' is just air."
He concluded:
"Without real benefits, elite talent will walk.
But with value-sharing, you build loyalty and ambition."
Inside Lab No. 2: The Interest Group System
Ren couldn't help but laugh as he described it.
"They even let researchers form hobby groups."
For example:
Three tech nerds who loved 1980s anime
They complained the picture quality was poor
So, they proposed developing a custom AI rendering engine
Lab No. 2 approved it
They were given access to supercomputers to process frame rendering
"Any other boss would have rejected that on sight," Ren said.
"It's not even remotely profitable."
But Lab No. 2 had a different rulebook:
Interest group R&D was allowed
Schedules were flexible
Salaries were tied to contribution, not hours clocked
That's how Haifeng pulled off the impossible:
In under two years, Lab No. 1 registered 21,341 patents
And new ones were being filed every day
"No matter how good someone is," Ren said,
"there are only 24 hours a day.
You can't run Lab No. 1 day and night."
"The rest of the labs had to step up—and they did."
Only now did Huawei realize the true scope:
Lab No. 1: Elite Precision R&D
Lab No. 2: Wild innovation and volume output
Patents covered everything from semiconductors to baseband to cloud
But what made Ren and his team genuinely uneasy?
China Star's aggressive entry into the low-end mobile market.
Huawei had just positioned Honor to capture that segment.
They couldn't afford to give ground.
Not to anyone.