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

Gladys Abbott
December 6, 2018

Early in April, Reuters had reported that since at least 2016, the us attorney's office in Brooklyn has been probing Huawei's alleged shipping of USA -origin products to Iran and other countries in violation of us export and sanctions laws.

Either way, China is nearly certain to view Meng's arrest as a major escalation in the trade war that will foment fears of a wider Cold War between the world's biggest economies.

The Meng arrest wasn't the only thing roiling the Asian markets today-Apple suppliers' shares have tumbled again after camera-lens supplier Largan Precision revealed a 28% fall in year-on-year monthly revenues.

USA stocks tumbled in early trading Thursday following a sell-off in overseas markets, knocking more than 450 points off the Dow Jones Industrials Average. It receives preferential treatment and is heavily subsidized by the Chinese government while purchasing technology from USA companies like Qualcomm.

In 2012, the House of Representatives released a report warning Huawei poses a national security threat to the USA, and American companies and its government should avoid doing business with the company. The Trump administration has argued that Huawei has benefited from market manipulation and other unfair practices. Huawei has repeatedly insisted Beijing has no influence over it. Huawei is not listed but China's second-largest telecom equipment maker ZTE Corp sank 9 per cent in Hong Kong while most of the nearby national bourses lost at least 2 per cent.

Huawei said in a statement that it had been provided with little information "about the charges" against Meng, who is also one of the vice chairs of its board and the daughter of founder Ren Zhengfei from his first marriage. Beijing is now likely to pressure Canada to release her and to press the United States to avoid a trial.

How have China and Huawei responded? "The Chinese side firmly opposes and strongly protests over such kind of actions which seriously harmed the human rights of the victim", reads a statement released by the embassy. "Imagine what the political response would be in the U.S".

The US Justice Department on Wednesday declined to comment.

In April, the sources told Reuters the US Justice Department probe was being run out of the US attorney's office in Brooklyn.

"No matter how much the Canadian side says that we're just following legal procedures, Chinese officials probably will believe that the arrest was directed or tacitly supported at very senior levels", he said.

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"Their goal is to decouple with China", said Wang Yong, a professor at the School of International Studies at Peking University.

Investors will fear that the shock detention of such a significant business figure could easily anger the Chinese government, and potentially scupper plans to buy more United States goods.

The Globe and Mail newspaper, citing law enforcement sources, said she is suspected of trying to evade USA trade curbs on Iran.

Sterling: US$1.2704, down 0.24%.

President Donald Trump restored access after ZTE agreed to pay a $1 billion fine, replace its executive team and embed a US -chosen compliance team in the company.

However, the topic ranked only 31st among trending items on Weibo as of Thursday afternoon, with many discussion threads apparently blocked, which is not unusual on China's heavily censored Internet. Later, the foreign ministry said it was still waiting for details on why she was arrested, and said trade talks should continue. -China relations. As of this morning, that relationship appears very, very rocky.

Various reports indicated that this could be related to violations of U.S. sanctions on Iran. The company's handset sales have all but come to a halt after AT&T backed out on a deal earlier this year.

Huawei has said it complies with all applicable export control and sanctions laws and USA and other regulations. "Huawei of course is a global player, and has made major inroads in developing countries, and even developed countries", Harwit said.

But the arrest of Ms. Meng complicates matters.

United States media have also reported that Huawei is under investigation for potential violations of USA sanctions against Iran.

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