Robert HARNEIS –TDO- (FRANCE)- The daughter of Huawei’s founder, a top executive at the Chinese technology giant, was arrested in Canada and faces extradition to the United States. Global stock markets fell as the move threatens to seriously worsen U.S. Chinese trade tensions.
The shock arrest of Meng Wanzhou, 46, who is Huawei Technologies Co Ltd.’s chief financial officer, raises fresh doubts over a 90-day truce on trade struck between Presidents Donald Trump and Xi Jinping on Saturday - the day she was detained.
Her arrest, revealed late on Wednesday by Canadian authorities, is related to U.S. sanctions against Iran. The arrest and any potential sanctions on the world’s second biggest smartphone maker could have major repercussions on the global technology supply chain. Shares in Asian suppliers to Huawei fell on Thursday.
Huawei is already under intense scrutiny from U.S. and other western governments about its ties to the Chinese government, driven by alleged concerns it could be used by the state for spying. It has been locked out of the U.S. and some other markets for telecom gear. Huawei has repeatedly insisted Beijing has no influence over it.
Meng, one of the vice chairs on the company’s board and the daughter of company founder Ren Zhengfei, was arrested on Dec. 1 at the request of U.S. authorities and a court hearing has been set for Friday, a Canadian Justice Department spokesman said. Trump and Xi had dined in Argentina on Dec. 1 at the G20 summit.
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,’ he said. ‘It’s a possibility. It’s a prominent member of their society and it’s a company that really embodies China’s quest for global recognition as a technology power.’
Mulroney said Canada should be prepared for ‘sustained fury’ from the Chinese and said it would be portrayed in China as Canada kowtowing to Trump. He also said that the Iran allegations were very damaging to Huawei and that China would push back hard.
Wenran Jiang, a senior fellow at the Institute of Asian Research at the University of British Columbia, said the Chinese would interpret the arrest, on the same day as Trump’s meeting in Argentina with Chinese President Xi Jinping, as a planned conspiracy to do damage.
‘She was in transit though Vancouver,’ he said. ‘That means the intelligence agencies in Canada and the US were tracking her and planning to arrest her for some time.’
He foresaw a crisis in relations between the three countries if Meng were extradited, and said any talk of a free trade agreement between Canada and China would end.
The United States may be calculating that China will not retaliate against US businesses in China because that would damage China as much as the US.