Arrest of Huawei CFO a unsafe precedent and threat to global trade
- by Claude Bryan
- in Markets
- — Dec 7, 2018
The timing of the arrest on Saturday, the same day USA president Donald Trump sat down to dinner with Chinese president Xi Jinping, has added to the likelihood the incident could derail a trade truce.
Meng's arrest during a stopover in Vancouver, announced by the Canadian authorities on December 5, pummeled stock markets already nervous about tensions between the world's two largest economies on fears the move could derail the planned trade talks.
U.S. media reports said Meng is suspected of breaching United States sanctions on Iran, prompting Chinese commentators to argue that USA domestic law had no jurisdiction over Chinese citizens.
Another U.S. official told Reuters that while it was a Justice Department matter and not orchestrated in advance by the White House, the case could send a message that Washington is serious about what it sees as Beijing's violations of global trade norms.
The Crown counsel is expected to argue that Meng poses a flight risk and should be kept in a detention facility, legal experts said.
Meng, 46, is deputy chairwoman of Huawei Technologies, one of China's telecom giants and a family business founded in 1987 by her former military-engineer father Ren Zhengfei. Meng Wanzhou is scheduled to appear in court on Friday for a bail hearing.
Huawei, which has confirmed Meng was arrested, said on Wednesday that "the company has been provided very little information regarding the charges and is not aware of any wrongdoing by Ms. Meng".
She could also be fitted with electronic monitoring equipment, and the court could go so far as to order security to monitor her while she awaits a decision on extradition, lawyers said. But Huawei spokesman Chase Skinner said in a statement that Huawei is unclear on why she was detained. She would also have to give up her passport, he said.
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"So not respecting this particular arrest, but Huawei is one company we've been concerned about".
Meng rose through the company ranks through hard work rather than privilege, said Wenran Jiang, a senior fellow at the University of British Columbia's Institute for Asian Research.
The Chinese embassy in Canada also issued strong warnings about the arrest.
But its U.S. 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.
James Lewis, director of technology policy at the Centre of Strategic and International Studies, who is also a former Commerce Department official, told United States news website Axios: "Huawei is one of the Chinese government's pet companies".
Some analysts say Meng's arrest could be used as a bargaining chip, but White House trade advisor Peter Navarro denied it was linked the US-China trade negotiations.
China has expressed extreme displeasure at the detainment of Meng Wanzhou and demanded her immediate release.
