Saturday, 15 December, 2018

How arrest of Huawei Technologies CFO extends troubled history with US

A Huawei logo is seen at a Huawei store at a shopping mall in Beijing Wednesday A Huawei logo is seen at a Huawei store at a shopping mall in Beijing Wednesday
Orlando Vargas | 07 December, 2018, 06:29

Meng Wanzhou, Huawei's chief financial officer and deputy chair, was arrested in Vancouver on 1 December.

The arrest came the same day as Trump's self-described "extraordinary" meeting with Chinese President Xi Jinping in Argentina, on the sidelines of the Group of 20 summit.

Thus, the arrest of Meng - which apparently had been planned through coordination by both Canadian and USA authorities - was seen by many hawkish Chinese analysts as a sign that the US government does not really intend to suspend aggressive actions against China. Early in April, Reuters had reported that since at least 2016, the USA attorney's office in Brooklyn has been probing Huawei's alleged shipping of us -origin products to Iran and other countries in violation of us export and sanctions laws.

On Thursday, China's Ministry of Foreign Affairs Geng Shuang responded to news of her arrest, demanding clarification regarding the reason for her arrest, as well as her immediate release.

The Chinese Embassy in Canada condemned the detention of Ms Meng denying she had violated Chinese or United States laws.

"The Chinese side firmly opposes and strongly protests over such kind of actions which seriously harmed the human rights of the victim", China said in a statement on its Canadian embassy's website.

Huawei Technologies Ltd., the biggest global supplier of network gear used by phone and Internet companies, has previously been the target of USA security concerns.

Huawei also said in a statement that it was compliant with "all applicable laws and regulations where it operates".

Huawei recently surpassed Apple to become the world's second-biggest smartphone-maker behind only Samsung.

It's also making it harder for Chinese firms to invest in United States companies or to buy American technology in such cutting-edge areas as robotics, artificial intelligence and virtual reality.

National security adviser John Bolton said in an interview with National Public Radio that he was aware before the dinner that an arrest was coming.

Huawei, the biggest global supplier of network gear used by phone and internet companies, has been the target of US security organizations.

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"There is ample evidence to suggest that no major Chinese company is independent of the Chinese government and Communist Party - and Huawei, which China's government and military tout as a "national champion" is no exception", senators Mark Warner and Marco Rubio wrote in October to Canadian Prime Minister Justin Trudeau. Huawei was a pioneering supplier of telecom gear at a time when China was spending heavily to upgrade its networks, importing much of its equipment.

In June 2014, Chinese businessman Su Bin was picked up on a USA warrant in Canada, where he had been attempting to establish residency.

The "message is clear - the USA is closing the borders to many Chinese technology companies", said Neil Campling, co-head Global Thematic Group at Mirabaud Securities.

No one answered the door when Postmedia News visited the Dunbar home Thursday afternoon, but neighbourhood residents said they recognized Meng from media reports, though they did not want to talk on the record.

MSCI's benchmark for global stocks declined 0.61 percent, and US markets were on track to open lower by 1 percent or more.

Canada's cyber security chief, however, said Ottawa was prepared for any possible retaliatory cyber attacks over the arrest.

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 are likely to play tit-for-tat on this one and we should be ready for it", said Fen Hampson, the director of the global security program at the Centre for International Governance Innovation based in southern Ontario.

Chinese media have lashed out at the U.S. over the arrest of senior Huawei executive Meng Wanzhou, accusing the country of using "hooliganism" to suppress the Chinese telecom giant at the centre of what is turning into a major diplomatic incident.

In the view of the United States and many outside analysts, China has embarked on an aggressive drive to overtake America's dominance in technology and global economic leadership.

USA media have reported that Huawei is under investigation for potential violations of U.S. sanctions against Iran. The US later replaced the ban with a fine and governance changes.

He declined to say whether it was in relation to sanctions against Iran.

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