China demands Canada releases Huawei’s chief financial officer
● Arrest prompts stockmarket drop ● Executive facing US extradition
China has demanded Canada release a Huawei Technologies executive who was arrested in a case that adds to technology tensions with Washington and threatens to complicate trade talks.
Huawei’s chief financial officer Meng Wanzhou faces possible extradition to the United States, according to Canadian authorities.
The Globe and Mail newspaper, citing law enforcement sources, said she was suspected of trying to evade US trade curbs on Iran.
The timing is awkward following the announcement of a Us-chinese ceasefire in a tariff war over Beijing’s technology policy. Meng was detained in Vancouver on Saturday – the day presidents Donald Trump and Xi Jinping met in Argentina and announced their deal.
Stock markets tumbled on the news, fearing renewed Uschinese tensions that threaten global economic growth. Hong Kong’s Hang Seng lost 2.5 per cent and the DAX in Germany sank 1.8 per cent.
A Chinese government statement said Meng broke no US or Canadian laws and demanded Canada “immediately correct the mistake” and release her.
Beijing asked Washington and Ottawa to explain the reason for Meng’s arrest. Foreign ministry spokesman Geng Shuang said arresting her without that reasoning violated her human rights.
But the ministry of commerce signalled Beijing wants to avoid disrupting progress toward settling a dispute with Washington over technology policy that has led them to raise tariffs on billions of dollars of each other’s goods.
China is confident they can reach a trade deal during the 90 days Mr Trump agreed to suspend US tariff hikes, ministry spokesman Gao Feng said.
Huawei Technologies Ltd. – the biggest global supplier of network gear used by phone and internet companies – has been the target of deepening US security concerns. Under Mr Trump and his predecessor Barack Obama, Washington has pressured European countries and other allies to limit use of its technology. The United States sees Huawei and smaller Chinese tech suppliers as possible fronts for spying and as commercial competitors. The Trump administration says they benefit from improper subsidies and market barriers. Mr Trump’s tariff hikes on Chinese imports stemmed from complaints Beijing steals or pressures foreign companies to hand over technology. But American officials also worry more broadly Chinese plans for state-led creation of Chinese champions in robotics, artificial intelligence and other fields might erode US industrial leadership.
“The United States is stepping up containment of China in all respects,” Zhu Feng, an international relations expert at Nanjing University, said. He said targeting Huawei, one of its most successful companies, “will trigger antius sentiment”. “The incident could turn out to be a breaking point,” Mr Zhu said.
Last month New Zealand blocked a mobile phone company from using Huawei equipment, saying it posed a “significant network security risk”. The company was banned in August from working on Australia’s fifth-generation network.
British phone carrier BT said it was removing Huawei equipment from the core of its mobile phone networks. It said Huawei was still a supplier of other equipment and a “valued innovation partner”.
US authorities were reportedly investigating whether Huawei violated sanctions on Iran. The Chinese government appealed to Washington to avoid any steps that might damage business confidence.
Huawei’s biggest Chinese rival ZTE Corp. was nearly driven out of business this year when Washington barred it from buying US technology over exports to North Korea and Iran.
The FTSE 100 lost more than three per cent as markets across Europe were hit by fears that trade tensions between the US and China could be reignited.
The index closed down 217.79 points or 3.2 per cent at 6,704.05. David Madden at CMC Markets said the severe losses came amid worries among investors over the relationship between the US and China becoming further strained by the arrest of Meng Wanzhou, the finance chief of Huawei.
“The Us-china relationship was moving in the right direction after the G20 summit, and now dealers feel all the good work could be undone. It is a broad based sell-off that we are seeing in London, as mining, energy, financial and consumer stocks are all lower,” he said
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Fashion retailer Boohoo confirmed it has been speaking to industry regulators about the its promotional offers. It comes after a BBC investigation revealed that promotions on Boohoo’s website did not end after a countdown clock stopped, making the promotions misleading as the time pressure was false. The company said the regulator has confirmed the matter is now closed. Shares closed down 5.1p at 176.95p.
Shares in Eve Sleep collapsed after the online mattress brand said investors taking part in a £15m fundraising plan will buy in at a steep discount. The stock closed down 13.3 per cent at 12.25p.