Beijing ups pressure over Huawei exec
US$11m Meng bond offer to Canada court
VANCOUVER: A jailed Chinese technology executive will have to wait at least one more day to see if she will be released on bail in a case that has raised US-China tensions and complicated efforts to resolve a trade dispute that has roiled financial markets and threatened global economic growth.
Meng Wanzhou, the chief financial officer of Chinese telecommunications giant Huawei and daughter of its founder, was detained at the request of the US during a layover at the Vancouver airport on Dec 1 — the same day that Presidents Donald Trump and Xi Jinping of China agreed to a 90-day ceasefire in the trade dispute that threatens to disrupt global commerce.
The US has accused Huawei of using a Hong Kong shell company to sell equipment to Iran in violation of US sanctions. It also says Ms Meng and Huawei misled banks about the company’s business dealings in Iran.
Justice William Ehrcke said the bail hearing would continue today.
In urging the court to reject Ms Meng’s bail request, prosecutor John Gibb-Carsley noted the Huawei executive has vast resources and a strong incentive to flee as she is facing fraud charges in the United States that could put her in prison for 30 years.
Mr Gibb-Carsley later told the judge that if he does decide to grant bail it should include house arrest.
David Martin, Ms Meng’s lawyer, said Ms Meng was willing to pay for a surveillance company to monitor her and wear an ankle monitor but she wanted to be able to travel around Vancouver and its suburbs. Scot Filer of Lions Gate Risk Management group said his company would make a citizen’s arrest if she breached bail conditions.
Mr Martin said Ms Meng’s husband would put up both of their Vancouver homes plus $1 million Canadian (24.5 million baht) for a total value of $15 million Canadian (366 million baht) as collateral.
The judge cast doubt on that proposal, saying Ms Meng’s husband isn’t a resident of British Columbia — a requirement for him to act as a guarantor that his wife won’t flee — and his visitor visa expires in February.
The prosecutor said her husband has no meaningful connections to Vancouver and spends only two or three weeks a year in the city. Mr Gibb-Carsley also expressed concern about the idea of using a security company paid by Ms Meng.
He said later that $15 million Canadian
would be an appropriate amount if the judge granted bail, but he said half should be in cash.
Ms Meng’s arrest has fuelled US-China trade tensions at a time when the two countries are seeking to resolve a dispute over
Beijing’s technology and industrial strategy. Both sides have sought to keep the issues separate, but the arrest has roiled markets, with stock markets worldwide down again on Monday.
Over the weekend, Chinese Vice Foreign Minister Le Yucheng summoned Canadian Ambassador John McCallum and US Ambassador Terry Branstad.
Mr Le warned both countries that Beijing would take steps based on their response. Asked on Monday what those steps might be, Chinese Foreign Ministry spokesman Lu Kang said, “It totally depends on the Canadian side itself.”
The province of British Columbia has already canceled a trade mission to China amid fears China could detain Canadians in retaliation for Ms Meng’s detention.
Canadian officials have declined to comment on the threats of retaliation.
The arrest last week in Canada of Meng Wanzhou, the chief financial officer of Huawei Technologies Co, China’s iconic company, is a watershed event. The arrest, made at the behest of the US Justice Department, has roiled markets around the world. It threatens to derail trade talks between the US and China, and to expose American businesses and executives in China to retaliation.
But the sense of humiliation Ms Meng’s arrest has provoked, and the passions it has unleashed in China, will also have long-term political effects.
Public opinion in China, as well as official statements, has already expressed cold anti-American fury. The sentiment that the US is ruthlessly thwarting China is unanimous. Here, as in many contemporary conflagrations, history should be our guide — and a warning.
It’s worth remembering today that an anti-American boycott — of the kind now being popularly mooted — was China’s first mass political movement of the modern era. Erupting in 1905, it expressed a long-simmering dissatisfaction with China’s Qing rulers for failing to stand up to foreign powers and protect Chinese interests and dignity.
A leading promoter of the boycott was Liang Qichao, China’s foremost modern thinker and an early intellectual mentor to its communist leaders. Liang had already warned his compatriots about their lowly status in the world, and prescribed ways to overcome it.
He had returned from the US in 1903, convinced that America’s new corporations would become more powerful world-conquerors than Alexander the Great and Napoleon. According to Liang, China urgently needed to accelerate industrial production through capitalist methods carefully regulated by the state. This was how it could withstand the unprecedented power of American capitalist imperialism.
After many calamities and tribulations, China has in fact fulfilled Liang’s dream of national pride and dignity — to the point where the US today fears the dominance of a Chinese corporation like Huawei (literally translated as “China’s achievement”).
Over the past three decades, Huawei has transformed itself from a small maker of telephone switches into the world’s largest supplier of telecommunications equipment. In recent months, it passed Apple Inc to become the world’s No.2 smartphone maker, behind Samsung Electronics Co; it produced what by a broad critical consensus were the best smartphones and laptops of 2018.
Huawei also leads in the revolutionary and strategically vital new technology of 5G, with its 80,000 research engineers and US$13 billion annual research and development budget.
The US has responded to Huawei’s global edge in the past year by presenting it as a Trojan horse for Chinese military interests, and urging its allies — Australia, Canada and the UK — to participate in a broad ban on the company. But Washington has yet to offer evidence of Huawei’s involvement in spying or cyberattacks.
The argument that Huawei’s founder is a former officer of the People’s Liberation Army, and therefore prone to help the Chinese government and military, becomes even less persuasive when one considers the close and gilded links between the Pentagon and Silicon Valley.
As The New York Times reported in 2013, “For years, the Pentagon has knocked on Silicon Valley’s door in search of programmers to work on its spying technologies”. The CIA funds a venture-capital entity that invests in dozens of companies whose products could be useful in spycraft. Moreover, the US government has surreptitiously used private companies, including Verizon and AT&T, to collect data on American citizens as well as foreign nationals.
Certainly, neutral observers of the US war on Huawei won’t be much impressed by the charges against Ms Meng: that she misled American banks about a Huawei subsidiary that did business in Iran, inducing them to violate arbitrarily imposed US sanctions.
The Chinese suspicion that there is a concerted American campaign against Huawei should be bolstered by the fact that President Donald Trump blocked a bid from a Singapore-based chip company for American chip maker Qualcomm Inc. As the highly secretive Committee on Foreign Investment in the US clarified, Qualcomm, which is locked into competition with Huawei on 5G patents, could’ve been undermined by the deal.
Ms Meng’s arrest is one more indication that under Mr Trump the China hawks — in the US Congress, the Justice Department, the intelligence establishment — are succeeding like never before in throttling Huawei. But such victories can only be dangerously counterproductive.
During the anti-American boycott of 1905, Liang spoke fervently of the “sleeping lion” that had been awakened by the indignities inflicted on the Chinese by the United States. Indeed, it was through such humiliations that anti-Westernism became a core component of Chinese nationalism, pushing Chinese leaders into irreversibly hard-line positions.
Today, the China hawks in the US seem to enjoy unrestricted license. But let there be no doubt: They’re poking a lion that is wide awake and increasingly angry.