US-China trade truce at stake after Huawei CFO’s arrest
A top executive and daughter of the founder of Chinese telecom giant Huawei has been arrested in Canada and faces extradition to the US, officials said on Thursday, roiling global stock markets as it threatened to inflame Sino-US trade tensions afresh.
The shock arrest of Meng Wanzhou, 46, who is Huawei Technologies’ chief financial officer, raises fresh doubts over a 90-day truce on trade struck between Presidents Donald Trump and Xi Jinping on Saturday - the day she was detained.
Her arrest, revealed late on Wednesday by Canadian authorities, is related to US sanctions, a person familiar with the matter said. Reuters was unable to determine the precise nature of the possible violations.
The arrest and any potential sanctions on the world’s second biggest smartphone maker could have major repercussions on the global technology supply chain. Shares in Asian suppliers to Huawei, which also counts Qualcomm and Intel among its major suppliers, tumbled on Thursday.
Huawei is already under intense scrutiny from US and other western governments about its ties to the Chinese government, driven by concerns it could be used by the state for spying. It has been locked out of the US and some other markets for telecom gear. Huawei has repeatedly insisted Beijing has no influence over it.
Meng, one of the vice chairs on the company’s board and the daughter of company founder Ren Zhengfei, was arrested on Dec. 1 at the request of US authorities and a court hearing has been set for Friday, a Canadian Justice Department spokesman said. Trump and Xi had dined in Argentina on Dec. 1 at the G20 summit.
News of her detention rippled through stock markets in Asia, particularly Shanghai and Hong Kong, with tech firms among the worst hit. By lunch Shanghai was 1.3 per cent lower while Hong Kong was 2.6 per cent off.
"China is working creatively to undermine our national security interests, and the United States and our allies can't sit on the sidelines," US Senator Ben Sasse in a statement linking the arrest to US sanctions against Iran.
"Sometimes Chinese aggression is explicitly statesponsored and sometimes it's laundered through many of Beijing's so-called 'private' sector entities that are in bed with (President) Xi (Jinping)'s communist party," he added.
"The Chinese side has lodged stern representations with the US and Canadian side, and urged them to immediately correct the wrongdoing and restore the personal freedom of Ms Meng Wanzhou."
Huawei said it was unaware of any wrongdoing by Meng and was provided "very little information" about the charges.
"Huawei complies with all applicable laws and regulations where it operates, including applicable export control and sanction laws and regulations of the UN, US and EU," the company said in a statement.