US-China ten­sion

Trump aide Bolton knew in ad­vance about the move

The Korea Times - - FRONT PAGE -

Ar­rest of Huawei ex­ec­u­tive in­ten­si­fies trade war fears

WASH­ING­TON (AFP) — The ar­rest of a top ex­ec­u­tive of tech gi­ant Huawei at the re­quest of U.S. au­thor­i­ties sig­nals a tough­en­ing stand in Wash­ing­ton on deal­ing with Chi­nese tech firms amid long­stand­ing con­cerns over cy­beres­pi­onage.

Meng Wanzhou, Huawei’s chief fi­nan­cial of­fi­cer, was de­tained this week in Canada and faces an ex­tra­di­tion re­quest from U.S. au­thor­i­ties over an in­ves­ti­ga­tion into sus­pected Iran sanc­tions vi­o­la­tions by the Chi­nese tech­nol­ogy gi­ant.

Meng is the daugh­ter of com­pany founder Ren Zhengfei, a for­mer Chi­nese Peo­ple’s Lib­er­a­tion Army en­gi­neer. China’s em­bassy in Canada is­sued a strong protest say­ing Meng was “not vi­o­lat­ing any Amer­i­can or Cana­dian law.”

The White House said Thurs­day it knew in ad­vance that Canada planned to ar­rest an ex­ec­u­tive of Huawei on the same day as a sum­mit be­tween Wash­ing­ton and Bei­jing.

“I knew in ad­vance. This is some­thing that we get from the Jus­tice De­part­ment,” Bolton told Na­tional Pub­lic Ra­dio.

“And these kinds of things hap­pen with some fre­quency. We cer­tainly don’t in­form the pres­i­dent on every one of them,” he said.

The move is likely to es­ca­late U.S.-China ten­sions. The re­la­tion­ship has been un­der pres­sure over con­cerns over un­fair trade, Chi­nese theft of trade se­crets and cy­beres­pi­onage.

“I do think this is a provo­ca­tion from the U.S. to­ward China,” said David Fi­dler, an In­di­ana Uni­ver­sity law pro­fes­sor and cy­ber­se­cu­rity fel­low at the Coun­cil on For­eign Re­la­tions.

Although the charges per­tain to Iran sanc­tions, “the Chi­nese are go­ing to see this as linked to the broader eco­nomic re­la­tion­ship,” Fi­dler added.

The es­ca­la­tion of trade fric­tions will re­sult in a “lose-lose on both sides,” ac­cord­ing to Fi­dler, with the Chi­nese likely to make it even more dif­fi­cult for U.S. tech firms to do busi­ness there.

“I think the Chi­nese be­lieve they have less to lose in stick­ing to their guns, and that they can ac­tu­ally stare down the United States,” he said.

“They have a plan B. I’m not sure the U.S. has a plan B if the re­la­tion­ship goes side­ways.”

A re­cent fed­eral law al­ready bans mil­i­tary and gov­ern­ment use of de­vices made by Huawei and fel­low Chi­nese firm ZTE over se­cu­rity con­cerns, and fed­eral reg­u­la­tors are in the process of im­ple­ment­ing rules that would bar Huawei for rolling out fifth-gen­er­a­tion, or 5G, net­works in the United States.

Huawei has de­nied any ties to the Chi­nese gov­ern­ment, but many in Wash­ing­ton are skep­ti­cal.

“Huawei acts as an arm of Chi­nese in­tel­li­gence, it is sup­ported by the Chi­nese gov­ern­ment for in­tel­li­gence rea­sons,” said James Lewis, who heads pub­lic pol­icy and tech­nol­ogy at the Cen­ter for Strate­gic and In­ter­na­tional Stud­ies.

“Huawei of­fers a sub­si­dized prod­uct that is pretty good, but they are go­ing to places where peo­ple put cost over se­cu­rity.”

Lewis said China may be hurt by tak­ing a harder line be­cause its 5G sys­tems rely on chips and other com­po­nents from Sil­i­con Val­ley firms.

For Huawei and many oth­ers, Lewis said, “they are com­pletely de­pen­dent on U.S. tech­nol­ogy. They could not make 5G without In­tel or other (U.S.) chip­mak­ers.”

Huawei has been un­der scru­tiny in Wash­ing­ton for more than a decade. It was de­nied a bid in 2007 for the tele­com net­work­ing firm 3Com and lost an ef­fort in 2010 to upgrade the Sprint wire­less net­work.

Ear­lier this year, Huawei had been in po­si­tion to an­nounce a ma­jor tieup with AT&T on smart­phone dis­tri­bu­tion in the United States, but abruptly can­celed the plan.

None­the­less, Huawei has over­taken Ap­ple as the se­cond-largest global maker of smart­phones, de­spite lim­ited U.S. sales, and has be­come one of the lead­ers in 5G in­fra­struc­ture around the world.

But Huawei is fac­ing bans for 5G con­tracts in Aus­tralia and New Zealand, and British tele­com group BT re­vealed on Wed­nes­day it was re­mov­ing Huawei equip­ment from its core cel­lu­lar net­work.

Of­fi­cials and law­mak­ers have long ex­pressed con­cerns over China’s use of its tech firms to steal trade se­crets and Bei­jing was seen as the main cul- prit in a breach of mil­lions of U.S. gov­ern­ment em­ploy­ees re­vealed in 2015.

Canada de­fends ar­rest

Canada on Thurs­day de­fended its ar­rest of an ex­ec­u­tive of Chi­nese tech gi­ant Huawei on a U.S. ex­tra­di­tion re­quest af­ter mar­kets wob­bled on fears of fresh fric­tion be­tween Wash­ing­ton and Bei­jing.

With China de­mand­ing the re­lease of Huawei chief fi­nan­cial of­fi­cer Meng Wanzhou, Cana­dian Prime Min­is­ter Justin Trudeau said of­fi­cers who ar­rested her Satur­day as she was chang­ing planes in Van­cou­ver had acted on their own.

“I can as­sure ev­ery­one that we are a coun­try (with) an in­de­pen­dent ju­di­ciary,” Trudeau told a tech con­fer­ence in Mon­treal. “And they took this de­ci­sion without any po­lit­i­cal in­volve­ment or in­ter­fer­ence.”

Reuters-Yon­hap

Vis­i­tors walk past Huawei’s booth dur­ing Mo­bile World Congress in Barcelona, Spain, in this Feb. 27 photo.

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