China's Huawei finance chief arrested in Canada, faces extradition to US

Marco Green
December 7, 2018

HP said it prohibits the sale of its products to Iran.

The timing is awkward following the announcement of a U.S. -Chinese cease-fire in a tariff war over Beijing's technology policy. Meng was detained in Vancouver on Saturday, the day Presidents Donald Trump and Xi Jinping met in Argentina and announced their deal.

Meanwhile, the substantially more independent South China Morning Post reported today that Meng and her father recently told Huawei employees that strict compliance with regulations was sometimes not financially feasible and could be avoided.

In the view of the United States and many outside analysts, China has embarked on an aggressive drive to overtake America's dominance in technology and global economic leadership. Hong Kong's Hang Seng lost 2.5 per cent and the DAX in Germany sank 1.8 per cent.

The arrest drew an immediate and severe reaction from China, which demanded Meng be released immediately.

A Chinese foreign ministry spokesman Geng Shuang reiterated Beijing wanted the USA and Canada "to clarify the grounds for the detention, to release the detainee and earnestly safeguard the legitimate rights and interests of the person involved", Bloomberg reported.

"So not respecting this particular arrest, but Huawei is one company we've been concerned about", he added. Huawei has denied the links.

"We will closely follow the development of the issue and take all measures to resolutely protect the legitimate rights and interests of Chinese citizens".

"The United States is stepping up containment of China in all respects", said Zhu Feng, an global relations expert at Nanjing University.

Huawei is one of the largest tech companies in the world, but it has been under pressure in nations like the USA, U.K., and Australia for allegedly doing the bidding of the Chinese government. At this point it's fair to say most of the goodwill coming out of last weekend's G20 meeting between Presidents Trump and Xi has evaporated.

"Recall that over 100 Chinese companies traded limit down (last month) when news broke the USA urged allies to blacklist Huawei?" The company was banned in August from working on Australia's fifth-generation network. Huawei was a pioneering supplier of telecom gear at a time when China was spending heavily to upgrade its networks, importing much of its equipment.

Huawei, the world's biggest network equipment maker ahead of Ericsson and Nokia, has said Beijing has no influence over its operations.

US prosecutors in NY have been investigating whether Huawei violated USA sanctions in relation to Iran. The Chinese government appealed to Washington to avoid any steps that might damage business confidence.

U.S. media have reported that Huawei is under investigation for potential violations of USA sanctions against Iran.

Its growing smartphone brand is among the top three global suppliers behind Samsung Electronics and Apple number of handsets sold.

Huawei released a statement saying its CFO was arrested while changing planes in Vancouver and is facing charges in "the Eastern District of NY".

"The company has been provided with very little information regarding the charges and is not aware of any wrongdoing by Ms. Meng".

As there is a publication ban in effect, which was requested by Meng, the department declined to provide any further detail of the extradition.

In a statement, it said it had complied with "all applicable laws and regulations where it operates, including applicable export control and sanction laws and regulations of the UN, US and EU".

One report in the New York Times said the USA commerce and treasury departments had subpoenaed the firm over suspected violation of sanctions against both Iran and North Korea.

Meng's detention also raised concerns about potential retaliation from Beijing in Canada, where Prime Minister Justin Trudeau sought to distance himself from the arrest. He also claimed that the incident "will seriously impact China and the US implementing consensus reached between two state leaders".

Meng is not only the chief financial officer of Huawei but the daughter of the tech giant's founder, Ren Zhengfei.

USA stock futures and Asian shares tumbled as news of the arrest heightened the sense a major collision was brewing between the world's two largest economic powers, not just over tariffs but also over technological hegemony. "He desperately wants a settlement", said Lam.

Asked whether he had spoken to the Chinese premier or the ambassador, Trudeau said he has had no conversations with worldwide counterparts about the case. That includes imposing limits on visas for Chinese students to study science and technology.

A statement from the Chinese embassy in Canada was far angrier.

David Mulroney, a former Canadian ambassador to China, said US and Canadian business executives could face reprisals in China.

"That's something we should be watching out for".

"If you have deep pockets, you have options", he said.

Other reports by Click Lancashire

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