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

Galtero Lara
Diciembre 7, 2018

Asked about the potential for ties with Beijing to sour, a Canadian government official said the two countries had a sophisticated relationship.

The chief financial officer of China's Huawei Technologies, Meng Wanzhou, was arrested in Vancouver on December 1 and faces extradition to the United States, Canada's Department of Justice said on Wednesday.

USA national security adviser John Bolton told NPR that he knew of the pending arrest in advance. It also demanded Meng's immediate release.

However, the arrest drew a swift response from China, which said it "firmly opposes and strongly protests" the move, adding it had urged Canada and the USA to "immediately correct the wrongdoing".

Brock University professor Charles Burton, a former Canadian diplomat who had served two postings in China, said Beijing was convinced the US administration had pressured Canada to go ahead with the arrest.

Meng Wanzhouf, who is the daughter of the Chinese technology giant's founder Ren Zhengfei, was arrested on suspicion of violating United States trade sanctions against Iran, Canada's The Globe and Mail newspaper reported.

A Canadian source with knowledge of the arrest said US law enforcement authorities are alleging that Ms. Meng tried to evade the USA trade embargo against Iran but provided no further details. US authorities have not disclosed circumstances surrounding Meng's arrest, but a person familiar with the matter told Reuters the arrest relates to violations of USA trade sanctions.

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.

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Despite Meng's arrest the same day that deal was announced, Beijing officials were standing by the agreement on Thursday.

Meng Wanzhou is scheduled to appear in court on Friday for a bail hearing. Details about the arrest are under a publication ban at Meng's request. Huawei is the crown jewel of Chinese tech and Ms Meng is effectively its princess. BT, Britain's largest mobile provider, said this week it was removing the equipment of Huawei from its 4G cellular network. It said Huawei still is a supplier of other equipment and a "valued innovation partner".

"The rapidly dwindling good-feeling towards the USA 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".

Still, Huawei's status as a kingpin of China's high-tech industry, at a time when the country is racing to catch up with the hard areas such as chip development, means it will nearly certainly remain a powerful force for years to come. Best Buy has even halted sales of Huawei devices completely in the U.S. Shortly afterwards a Canadian citizen in China was arrested and charged with spying. It is expected to speed up the development of self-driving cars and other technologies that rely on the internet of things.

ZTE, China's second-largest telecoms equipment maker, agreed to pay $1.4 billion in total fines to the United States after Washington slapped a ban in April on purchases of essential American components for seven years to punish the company for Iran sanctions violations. Top carriers Verizon Communications and AT&T pulled out of deals to distribute Huawei smartphones earlier this year.

FILE - People walk past a sign board of Huawei at CES (Consumer Electronics Show) Asia 2018 in Shanghai, China, June 14, 2018.

Huawei has managed to achieve significant global market share despite the fact that it is largely shut out of the American market.

MSCI's benchmark for global stocks declined 0.61 percent, and USA markets were on track to open lower by 1 percent or more. President Trump has agreed to postpone planned tariff hikes on Chinese goods, while China has pledged to purchase a "very substantial" amount of American produce and curb the export of deadly opioid Fentanyl to the USA in exchange.

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