Top Amer­i­can ex­ecs fear China reprisal af­ter Huawei ar­rest

Business Standard - - WORLD - FANNY POTKIN & ADAM JOUR­DAN

At a closed-door se­cu­rity meeting of US com­pa­nies in Sin­ga­pore on Thurs­day, one topic was high on the agenda: the ar­rest of a top ex­ec­u­tive at Chi­nese tech gi­ant Huawei and the po­ten­tial back­lash on Amer­i­can firms op­er­at­ing in China.

Of­fi­cials from ma­jor US com­pa­nies who at­tended the event, a sched­uled meeting of the lo­cal chap­ter of the US Depart­ment of State’s Over­seas Se­cu­rity Ad­vi­sory Coun­cil (OSAC), voiced con­cerns about re­tal­i­a­tion against Amer­i­can firms and their ex­ec­u­tives, two peo­ple with knowl­edge of the meeting said.

A num­ber of at­ten­dees said their com­pa­nies were con­sid­er­ing re­strict­ing non-es­sen­tial China travel and look­ing to move meetings out­side the coun­try, one of the peo­ple added.

Se­cu­rity ex­ec­u­tives for com­pa­nies in­clud­ing Walt Dis­ney, Al­pha­bet's Google, Face­book, and Pay­Pal Hold­ings at­tended the meeting, ac­cord­ing to the sources and a LinkedIn post­ing by one of the at­ten­dees.

The com­pa­nies all de­clined to com­ment or did not re­spond to re­quests for com­ment prior to pub­li­ca­tion.

Fol­low­ing pub­li­ca­tion of this story, Google spokesper­son Taj Mead­ows said in a state­ment that it “mis­rep­re­sents” what hap­pened at the meeting. He as­serted that there was “no dis­cus­sion on the record or be­hind closed doors about the ar­rest of a top Huawei ex­ec­u­tive or about Amer­i­can com­pa­nies op­er­at­ing in China”.

Mead­ows also said he was not at the meeting and could not say whether at­ten­dees dis­cussed China travel in­for­mally.

The dis­cus­sions at the meeting un­der­score con­cerns rip­pling through US busi­nesses in the world's sec­ond largest econ­omy, al­ready fac­ing a del­i­cate bal­anc­ing act amid a tense trade stand­off be­tween Washington and Bei­jing.

The for­mal agenda for the meeting, held at Google's Asia-Pa­cific head­quar­ters in Sin­ga­pore, in­cluded pre­sen­ta­tions on eco­nomic crime and ter­ror­ism in the re­gion. OSAC pro­motes "se­cu­rity co­op­er­a­tion be­tween Amer­i­can pri­vate sec­tor in­ter­ests world­wide and the US Depart­ment of State," ac­cord­ing to its web­site.

But in­for­mal con­ver­sa­tions among at­ten­dees soon turned to pos­si­ble risks in China prompted by the ar­rest of Meng Wanzhou, the chief fi­nan­cial of­fi­cer and "heiress" of Chi­nese tele­com net­work equip­ment gi­ant Huawei Tech­nolo­gies Co Ltd, who was

de­tained in Canada on Dec. 1. The news of the ar­rest was made pub­lic on Wed­nes­day.

Meng, the daugh­ter of Huawei's founder, was held at Washington's re­quest as part of a U.S. in­ves­ti­ga­tion of an al­leged scheme to use the global bank­ing sys­tem to evade U.S. sanc­tions against Iran, peo­ple fa­mil­iar with the probe said.

The ar­rest has roiled global mar­kets amid fears that it could fur­ther in­flame the Sino-US trade row.

Risk con­sul­tants and an­a­lysts said that the ar­rest could prompt Bei­jing to re­tal­i­ate in some form.

"This will pres­sure a lot of Chi­nese of­fi­cials to look strong in this dis­pute," said Nick Marro, Hong Kong-based Asia an­a­lyst at the Econ­o­mist In­tel­li­gence Unit, who added that tech­nol­ogy com­pa­nies were par­tic­u­larly at risk.

"This could mean ei­ther tak­ing a stronger stance on trade ne­go­ti­a­tions, or tak­ing a stronger stance on U.S. tech firms in China right now."

Later, China warned Canada on Satur­day that there would be se­vere con­se­quences if it did not im­me­di­ately re­lease Huawei's chief fi­nan­cial of­fi­cer, call­ing the case "ex­tremely nasty". "China strongly urges the Cana­dian side to im­me­di­ately re­lease the de­tained per­son, and earnestly pro­tect their law­ful, le­git­i­mate rights, oth­er­wise Canada must ac­cept full re­spon­si­bil­ity for the se­ri­ous con­se­quences caused." The state­ment did not elab­o­rate.

China warned Canada that there would be se­vere con­se­quences if it did not im­me­di­ately re­lease Huawei's CFO

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