China demands release of Huawei executive arrested in Canada
China has demanded the immediate release of a senior Huawei telecoms executive whose arrest is threatening to escalate into a major diplomatic incident.
Beijing is calling for both Ottawa and Washington to clarify their reasons for the detention of Meng Wanzhou, the Chinese company’s global chief financial officer, who was arrested in Vancouver on Saturday and faces extradition to the US.
Canada confirmed her detention on Wednesday night.
A Chinese foreign ministry spokesman said on Thursday that Beijing had separately called on the US and Canada to “clarify the reasons for the detention” immediately and “immediately release the detained person”.
The spokesman said China had been providing consular assistance to Meng since learning of her arrest.
Meng is one of the vice-chairs on the Chinese technology company’s board and is the daughter of the company’s founder, Ren Zhengfei.
Her arrest is reportedly related to alleged violations of US sanctions. A court hearing has been set for Friday, according to Canada’s department of justice.
In a statement, the department confirmed Meng had been arrested and was facing extradition.
“As there is a publication ban in effect, we cannot provide any further detail at this time,” it said. “The ban was sought by Ms Meng.”
US stock futures and Asian shares tumbled after Meng’s arrest. The news came as Washington and Beijing begin three months of negotiations aimed at de-escalating their trade war, which is adding to global investors’ worries over rising US interest rates and other risks to global economic growth.
Fearing that a US-China trade war truce is becoming unattainable, Europe’s main stock indices slumped to their lowest point since December 2016 in morning trading on Thursday. The FTSE 100 fell by 2.5%, while benchmark indices in France, Germany and Italy all lost more than 2%.
Norihiro Fujito, the chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo, said: “The US has been telling its allies not to use Huawei products for security reasons and is likely to continue to put pressure on its allies.
“So while there was a brief moment of optimism after the weekend USChina talks … the reality is, it won’t be that easy.”
US authorities have been investigating Huawei since at least 2016 for allegedly shipping US-origin products to Iran and other countries in violation of US export and sanctions laws, sources told Reuters in April.
Huawei, one of the world’s largest makers of telecommunications network equipment, said in a statement that Meng had been temporarily detained and faced “unspecified allegations” in the eastern district of New York.
The company said it had complied with “all applicable laws and regulations where it operates”, including sanction laws.
“There has been very little information provided to Huawei on the specific allegations. Huawei is not aware of any misconduct by Ms Meng,” Guo Ping, the current CEO of the company, said in a statement posted on his Wechat account on Thursday.
“The company believes the Canadian and US legal systems will ultimately reach a just conclusion,” he said.
Canada’s prime minister, Justin Trudeau, said that his government had played no role in Meng’s arrest.
“I can assure everyone that we are a country [with] an independent judiciary,” Trudeau told a technology conference in Montreal. “And they took this decision without any political involvement or interference.”
The arrest came days after Donald Trump and his Chinese counterpart, Xi Jinping, held a meeting in Argentina where they agreed to steps to resolve the continuing trade war.
On Thursday, Trump’s national security adviser, John Bolton, told National Public Radio he had been aware of the pending legal action against Meng.
“I knew in advance. That is something we get from the justice department,” Bolton said, although he added that he did not know if Trump also knew.
Bolton declined to specify the allegations against Meng, but said: “Huawei is one company we’ve been concerned about” regarding intellectual property theft and dealing with Iran.
Meng served on the board of Hong Kong-based Skycom Tech, which has business in Iran, according to corporate filings seen by Reuters.
In 2013, Reuters found that the company, which attempted to sell embargoed Hewlett-Packard computer equipment to Iran’s largest mobile phone operator, had closer ties to Huawei than was previously known.
Meng, the oldest of Ren’s three children, was promoted this year to serve as vice-chair on the company’s board on a rotating basis, in a move many took as a sign that she was being groomed to take over from her father. Ren, a retired officer of the People’s Liberation Army, founded Huawei in 1987.
Huawei – one of the world’s largest telecoms equipment and services providers – has been tightly constrained in the US by worries it could undermine local competitors and that its phones and networking equipment, used widely in other countries, could provide Beijing with avenues for espionage.
On Wednesday, BT, the UK telecoms group, confirmed that it was in the process of removing Huawei equipment from the key parts of its 3G and 4G networks, as part of an existing internal policy not to have the Chinese company at the centre of its infrastructure.
The head of MI6 also suggested this week that the UK needed to decide if it was “comfortable” with Chinese ownership of the technology being used.
Governments in New Zealand and Australia have also moved to block the use of Huawei’s equipment in future 5G networks.
In China, online users and commentators reacted angrily to the news of Meng’s arrest. The Canadian embassy’s Weibo page was bombarded with posts criticising its role in the incident.
One user wrote: “Hello, American’s dog. What about human rights? What about freedom?”
On the US embassy’s page, another wrote: “Get out of China.”
Hu Xijin, the editor of China’s often stridently patriotic state-run tabloid the Global Times, posted on Weibo: “It is clear the US is pushing the battle line to our door … we can completely regard the US arrest of Meng Wanzhou as a declaration of war against China.”