Huawei CFO arrest: 5 things to know about China's Huawei

Ivan Schwartz
December 6, 2018

The arrest of Huawei's chief financial officer Sabrina Meng Wanzhou will add to uncertainties in trade negotiations between China and the United States, and Washington may use the case to pressure Beijing, analysts say.

Ms. Meng's arrest also raised broader fears about the future of Huawei, and the prospects for resolution of a damaging trade dispute between China and the U.S.

Meng faces extradition to the USA, where investigators are probing Huawei's alleged non-compliance with sanctions on Iran.

"However, the arrest has the potential to shatter very fragile US - Sino relations which will weigh further on global trade and growth concerns".

The tech rout and renewed trade worries pulled the Shanghai Composite index down 1.3 per cent to 2,615.82 points, and the blue-chip CSI300 index fell 1.6 per cent.

That was until her shock arrest in Canada at the request of USA authorities on Wednesday, a move that has entangled her in the protracted diplomatic tensions between Washington and Beijing.

U.S. authorities in 2016 began voicing concerns that Huawei and others could install back doors in their equipment that would let them monitor users in the U.S. Huawei has denied those allegations.

U.S. national security officials have said Huawei poses a security risk due to its alleged close links to the Chinese government. Huawei has repeatedly insisted Beijing has no influence over it.

Wanzhou Meng - also deputy chairwoman and the daughter of Huawei's founder - faces extradition to the USA, said Ian McLeod, a Canada Justice Department spokesman. Investors have now lost confidence in the long-term effectiveness of the agreement struck between Presidents Trump and Xi at the G20.

The state-run Global Times, which is owned by the mouthpiece of China's Communist Party, the People's Daily, has warned that there will be repercussions in a short statement on Twitter.

A Chinese government statement said Meng broke no USA or Canadian laws and demanded Canada "immediately correct the mistake" and release her.

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She urged protesters to seize on the French government's weakness to push other demands such as a rise in the minimum wage. Macron's move was "on the right path but, in my opinion, it will not fundamentally change the movement", she said.

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And even though so, let's say God forbid we don't, my man is a great father to his kids, so I will never lose. She said , "I've been trying to work things out with my baby father for how many now". "It's nobody fault.

She was detained when she was transferring flights in Canada, it added.

How have China and Huawei responded?

Canadian Justice Department spokesman Ian McLeod said the U.S.is seeking Meng's extradition, but couldn't provide further details about the case because a publication ban is in effect at Meng's request. "The Chinese side firmly opposes and strongly protests over such kind of actions which seriously harmed the human rights of the victim", the statement said.

"While there was a brief moment of optimism after the weekend U.S". US national Security officials were aware of the arrest prior to the news breaking Wednesday evening, a different source said.

In April, the sources told Reuters the US Justice Department probe was being run out of the US attorney's office in Brooklyn. "The company believes the Canadian and USA legal systems will ultimately reach a just conclusion", the statement said.

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

Centene sank 7.3 per cent to US$131.80.

A Chinese foreign ministry spokesperson told reporters her detention was possibly a rights abuse. BT, Britain's largest mobile provider, said this week it was removing the equipment of Huawei from its 4G cellular network.

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.

Wenran Jiang, a senior fellow at the Institute of Asian Research at the University of British Columbia, said the Chinese will read the arrest on the same day as the Trump meeting with the Chinese leader as a planned conspiracy to do damage.

Other reports by GizPress

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