Huawei exec’s arrest may put Canada in China’s crosshairs, warn trade experts

Devin Lawrence
December 7, 2018

"Recently, our corporate CFO, Ms. Meng Wanzhou, was provisionally detained by the Canadian Authorities on behalf of the United States of America, which seeks the extradition of Ms. Meng Wanzhou to face unspecified charges in the Eastern District of NY, when she was transferring flights in Canada", the statement reads.

"The rapidly dwindling good-feeling towards the U.S. and China's vague trade war ceasefire turned actively hostile on Thursday, investors fearing that, 90-day truce or not, the relationship between the two superpowers might be about to take a turn for the worse".

Chinese Foreign ministry spokesman Geng Shuang told reporters Thursday that the Chinese government also wants Canadian officials to reveal the reasoning. Meng was detained in Vancouver on Saturday, the day Trump and Xi Jinping met in Argentina and announced their deal.

Huawei said in a statement Wednesday it has not been provided many details about Meng's arrest.

Huawei said in a statement that it had been given little information "about the charges" against Meng. The company said it wasn't aware of any wrongdoing by the CFO and that authorities in both countries will "ultimately reach a just conclusion".

In its statement Wednesday, Huawei said the company complies with all laws and regulations in the countries where it operates, including applicable export control, sanction laws and regulations of the United Nations, the United States and the European Union.

The statement said that Meng has been "temporarily detained" when she was "transferring flights in Canada" and that Meng faces "unspecified charges in the Eastern District of NY".

A White House official told Reuters Trump did not know about a us request for her extradition from Canada before he met Xi and agreed to a 90-day truce in the brewing trade war.

Huawei is one of the world's largest telecoms companies, and is the world's second-largest smartphone manufacturer behind Samsung. "The Chinese government should seriously mull over the USA tendency to abuse legal procedures to suppress China's high-tech enterprises".

In April, the Federal Communications Commission adopted a proposal to prohibit the use of universal service funds to purchase equipment or services from any company identified as posing a national security risk to communications networks.

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The probe of Huawei is similar to one that threatened the survival of China's ZTE Corp 0763.HK 000063.SZ , which pleaded guilty in 2017 to violating US laws that restrict the sale of American-made technology to Iran. If she chooses not to fight, she could be in the United States within weeks, experts said. China has demanded the release of Meng claiming her detention might be a violation of human rights.

Ms Meng's arrest is part of an ongoing investigation by USA prosecutors into whether Huawei violated banking laws as it sought to evade sanctions against Iran by routing a series of transactions through HSBC Holdings, according to a person briefed on the matter.

In a statement, Huawei spokesman Chase Skinner confirmed that Meng was ar‌res‌te‌d at the request of US officials.

The Dow Jones fell more than 700 points on Thursday, as news broke of Huawei CFO Meng Wanzhou's arrest and planned extradition to the US.

China has condemned the arrest.

Why is Huawei a concern to the West?

The ministry also said the United States trade talks should continue as a 90-day pause on new tariffs between the U.S. and China enters its second week. "We certainly don't inform the President on every one of them".

Bolton also declined to discuss specifics over Meng's arrest, saying it was a matter for law enforcement.

He added that the U.S. has had "enormous concerns for years about the [.] practice of Chinese firms to use stolen American intellectual property, to engage in forced technology transfers, and to be used as arms of the Chinese government's objectives in terms of information technology in particular".

For a period of time she was in charge of Huawei's internationalization efforts, which have been extremely successful, said Jiang. After ceasing major operations as a result, ZTE paid another $1 billion as part of a deal to get the ban lifted.

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