The Southern Times

4 Friday 07 - 13 December 2018 The Southern Times
■ NEWS
China demands Canada
release Huawei executive
Beijing - China on Thursday
demanded Canada release
a Huawei Technologies
executive who was arrested in a
case that adds to technology tensions
with Washington and threatens
to complicate trade talks.
Huawei’s chief financial officer,
Meng Wanzhou, faces possible
extradition to the United States,
according to Canadian authorities.
The Globe and Mail newspaper, citing
law enforcement sources, said
she is accused of trying to evade US
curbs on trade with Iran.
The timing is awkward following
the announcement of a US-Chinese
cease-fire in a tariff war over Beijing’s
technology policy. Meng was
detained in Vancouver on Saturday,
the day Presidents Donald Trump
and Xi Jinping met in Argentina
and announced their deal.
Asian stock markets tumbled on
the news, fearing renewed US-Chinese
tensions that threaten global
economic growth. Market indexes
in Tokyo and Hong Kong by 1.9%
and 2.8% and Shanghai was off 1.7%
at midday.
The Chinese Embassy in Ottawa
said Meng broke no US or Canadian
laws and demanded Canada
“immediately correct the mistake”
and release her.
“The Chinese side expresses firm
opposition and strongly protests
this serious violation of human
rights,” said an embassy statement.
Huawei Technologies Ltd., the
biggest global supplier of network
gear used by phone and internet
companies, has been the target of
deepening US security concerns.
Washington has pressured European
countries and other allies to
limit the use of its technology.
The US sees Huawei and smaller
Chinese tech suppliers as possible
fronts for Chinese spying and as
commercial competitors that the
Trump administration says benefit
from improper subsidies and
market barriers.
Trump’s tariff hikes this year on
Chinese imports stemmed from
complaints Beijing steals or pressures
foreign companies to hand
over technology. But American
officials also worry more broadly
about Chinese plans for state-led
industry development they worry
might erode US industrial leadership.
US leaders also worry that Beijing
is using the growth of Chinese
business abroad to gain strategic
leverage.
“The United States is stepping
up containment of China in all
respects,” said Zhu Feng, an international
relations expert at Nanjing
University. He said targeting
Huawei, one of the most successful
Chinese companies, “will trigger
anti-US sentiment in China.”
“The incident could turn out to
be a breaking point,” Zhu said.
Last month, New Zealand
blocked a mobile phone company
from using Huawei equipment, saying
it posed a “significant network
security risk.” In August, Australia
banned the company from working
on the country’s fifth-generation
network due to security concerns.
The Wall Street Journal reported
this year that US authorities are
investigating whether Huawei
violated sanctions on Iran. The
Chinese government appealed to
Washington to avoid any steps that
might damage business confidence.
Huawei’s Chinese rival, ZTE
Corp., was nearly driven out of
business this year when Washington
barred it from buying US
technology over exports to North
Korea and Iran. Trump restored
access after ZTE agreed to pay a
US$1 billion fine, replace its executive
team and embed a US-chosen
compliance team in the company.
Huawei is regarded as far
stronger commercially than ZTE.
The company based in Shenzhen,
near Hong Kong, has the biggest
research and development budget
of any Chinese company and a vast
portfolio of tech patents, making it
less dependent on American suppliers.
It also has a growing smartphone
brand that is one of the top three
global suppliers behind Samsung
Electronics and Apple Inc. by the
number of handsets sold.
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Meng was changing flights in
Canada when she was detained
“on behalf of the United States
of America” to face “unspecified
charges” in New York, according
to a Huawei statement.
“The company has been provided
very little information regarding
the charges and is not aware of any
wrongdoing by Meng,” the statement
said.
A US Justice Department spokesman
declined to comment.
Huawei said it complies with
all laws and rules where it operates,
including export controls and
sanctions of the United Nations,
the United States and European
Union.
Meng is a prominent member of
China’s business world as deputy
chairman of Huawei’s board and
the daughter of its founder Ren
Zhengfei, a former Chinese military
engineer.
Despite that, her arrest is
unlikely to derail US-Chinese
trade talks, said Willy Lam, a politics
specialist at the Chinese University
of Hong Kong.
“I think too much is at stake for
Xi Jinping. He desperately wants a
settlement,” said Lam. “So I don’t
think this will have a really detrimental
impact on the possibility
of both countries reaching a deal.”
Longer term, however, the case
will reinforce official Chinese
urgency about developing domestic
technology suppliers to reduce
reliance on the United States, said
Lam.
Trump has “pulled out all the
stops” to hamper Chinese ambitions
to challenge the United States
as a technology leader, Lam said.
That includes imposing limits on
visas for Chinese students to study
science and technology.
“If the Chinese need further convincing,
this case would show them
beyond doubt Trump’s commitment,”
said Lam.
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. It’s a possibility.
China plays rough,” Mulroney
said. “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 the arrest will
be portrayed in China as Canada
kowtowing to Trump. He also said
the Iran allegations are very damaging
to Huawei and China will
push back hard.
The Chinese will view Meng’s
arrest on the same day as Trump’s
meeting with the Chinese leader as
a planned conspiracy to do damage,
said Wenran Jiang, a senior
fellow at the Institute of Asian
Research at the University of British
Columbia.
“She was in transit through Vancouver.
That means the intelligence
agencies in Canada and the US
were tracking her and planning to
arrest her for some time,” he said.
Jiang foresees a crisis in relations
between the three countries
if Meng is extradited.
Any talk of a free trade agreement
between Canada and China
would be over, he said.
US Sen. Ben Sasser, a Republican
member of the Senate Armed
Services and Banking committees,
said Huawei is an agent of China’s
ruling Communist Party and
applauded Canada for the arrest.
“Americans are grateful that our
Canadian partners have arrested
the chief financial officer of a
giant Chinese telecom company
for breaking US sanctions against
Iran,” he said. - Nampa/AP
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