Huawei’s top executive arrested on US request, clouding China trade truce

Published December 7, 2018
The arrest stirred tensions just as the United States and China agreed to a ceasefire in their trade spat. — Photo from Twitter
The arrest stirred tensions just as the United States and China agreed to a ceasefire in their trade spat. — Photo from Twitter

BEIJING: China reacted furiously on Thursday after a top executive and daughter of the founder of Chinese telecom giant Huawei was arrested in Canada following a US extradition request, threatening to rattle a trade war truce with the United States.

The detention of Meng Wanzhou, Huawei’s chief financial officer, comes after American authorities reportedly launched an investigation into suspected Iran sanctions violations by Huawei, which was already under scrutiny by US intelligence officials who deemed the company a national security threat.

The arrest stirred tensions just as the United States and China agreed to a ceasefire in their trade spat while negotiators seek a deal within three months.

“We have made solemn representations to Canada and the US, demanding that both parties immediately clarify the reasons for the detention, and immediately release the detainee to protect the person’s legal rights,” Chinese foreign ministry spokesman Geng Shuang told a regular press briefing in Beijing.

Meng was arrested in Vancouver on Dec 1, Canada’s ministry of justice said in a statement on Wednesday, prompting China’s embassy to say it had “seriously harmed the human rights of the victim”.

The ministry said the US is seeking her extradition and she faces a bail hearing on Friday, adding it could not provide further details due to a publication ban that was sought by Meng, whose father, Huawei founder Ren Zhengfei, is a former Chinese People’s Liberation Army engineer.

Huawei, which overtook Apple as the world’s number two smartphone maker this year, said it was unaware of any wrongdoing by Meng and was provided “very little information” about the charges. The Wall Street Journal reported in April that the US Department of Justice had opened an investigation into suspected violations of Iran sanctions by Huawei.

The New York Times said the company had been subpoenaed by the US Commerce and Treasury Departments over alleged violations of Iran and North Korea sanctions.

The arrest occurred on the same day that US President Donald Trump and Xi struck the trade war truce at a summit in Argentina.

Ye Tan, an independent Chinese economist, said Meng’s arrest could be used as a “bargaining chip” in the trade talks. “The talks will continue but it’s going to be a lot more tense with higher stakes,” Ye said.

But Geng, the foreign ministry spokesman, said both countries will follow the agreement reached by Trump and Xi to “increase consultations, and work towards an earliest possible mutually beneficial agreement”.

Huawei is one of the world’s largest telecommunications equipment and services providers. But its US business has been tightly constrained by worries it could undermine American competitors and that its cellphones and networking equipment, used widely in other countries, could provide Beijing with avenues for espionage.

Published in Dawn, December 7th, 2018

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