China de­mands Canada re­lease exec

The Maui News - - TODAY’S PEOPLE - By JOE McDON­ALD and ROB GILLIES The As­so­ci­ated Press

BEI­JING — China on Thurs­day de­manded that Canada re­lease an ex­ec­u­tive of Chi­nese tech gi­ant Huawei who was ar­rested in a case that com­pounds ten­sions with the U.S. and threat­ens to com­pli­cate trade talks.

Meng

Wanzhou, chief fi­nan­cial of­fi­cer of

Huawei Tech­nolo­gies Ltd., faces pos­si­ble ex­tra­di­tion to the United

States. The Globe and Mail news­pa­per, cit­ing law en­force­ment sources, said she is sus­pected of try­ing to evade U.S. trade curbs on Iran.

Huawei, the big­gest global sup­plier of net­work gear used by phone and in­ter­net com­pa­nies, has been the tar­get of deep­en­ing U.S. se­cu­rity con­cerns. Un­der Pres­i­dent Don­ald Trump and his pre­de­ces­sor, Barack Obama, Wash­ing­ton has pres­sured Euro­pean coun­tries and other al­lies to limit use of its tech­nol­ogy.

The U.S. sees Huawei and smaller Chi­nese sup­pli­ers as pos­si­ble fronts for spy­ing and as com­mer­cial com­peti­tors. The Trump ad­min­is­tra­tion says they ben­e­fit from im­proper sub­si­dies and mar­ket bar­ri­ers.

The tim­ing of the ar­rest is awk­ward fol­low­ing the an­nounce­ment of a U.S.-Chi­nese cease-fire in a trade war that has its roots in Bei­jing’s tech­nol­ogy pol­icy. Meng was de­tained in Van­cou­ver on Satur­day, the day Trump and Xi Jin­ping met in Ar­gentina and an­nounced their deal.

U.S. na­tional se­cu­rity ad­viser John Bolton told NPR that there has been enor­mous con­cern about the prac­tice of Chi­nese firms like Huawei al­legedly us­ing stolen U.S. in­tel­lec­tual prop­erty. He said that would be a ma­jor sub­ject of ne­go­ti­a­tions with China.

Stock mar­kets tum­bled on the news, fear­ing re­newed U.S.-Chi­nese ten­sions that threaten global eco­nomic growth. Stocks fell more than 780 points be­fore the Dow Jones In­dus­trial Av­er­age ral­lied to fin­ish 79 points down.

A Chi­nese gov­ern­ment state­ment said Meng broke no U.S. or Cana­dian laws and de­manded Canada “im­me­di­ately cor­rect the mis­take” and re­lease her.

But the Min­istry of Com­merce sig­naled that Bei­jing wants to avoid dis­rupt­ing progress to­ward a set­tle­ment 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 deal dur­ing the 90 days that Trump agreed to sus­pend U.S. tar­iff hikes, said a min­istry spokesman, Gao Feng.

Trump’s tar­iff hikes on Chi­nese im­ports stemmed from com­plaints Bei­jing steals or pres­sures for­eign com­pa­nies to hand over tech­nol­ogy. But U.S. of­fi­cials also worry more broadly that Chi­nese plans for state-led cre­ation of Chi­nese cham­pi­ons in ro­bot­ics, ar­ti­fi­cial in­tel­li­gence and other fields might erode U.S. in­dus­trial lead­er­ship.

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.

On Wed­nes­day, Bri­tish phone car­rier BT said it was re­mov­ing Huawei equip­ment from the core of its mo­bile phone net­works. It said Huawei still is a sup­plier of other equip­ment and a “val­ued in­no­va­tion part­ner.”

Huawei’s big­gest Chi­nese ri­val, ZTE Corp., was nearly driven out of busi­ness this year when Wash­ing­ton barred it from buy­ing U.S. tech­nol­ogy over ex­ports to North Ko­rea and Iran. Trump re­stored ac­cess af­ter ZTE agreed to pay a $1 bil­lion fine, re­place its ex­ec­u­tive team and em­bed a U.S.cho­sen com­pli­ance team.

Huawei is re­garded as far stronger com­mer­cially than ZTE. Huawei has the big­gest re­search and de­vel­op­ment bud­get of any Chi­nese com­pany and a vast port­fo­lio of patents, mak­ing it less de­pen­dent on Amer­i­can sup­pli­ers.

Its grow­ing smart­phone brand is among the top three global sup­pli­ers be­hind Sam­sung Elec­tron­ics and Ap­ple.

Huawei said it com­plies with all laws and rules where it op­er­ates, in­clud­ing ex­port con­trols and sanc­tions of the U.N., the U.S. and Euro­pean Union.

Meng’s ar­rest also threat­ened to in­flame dis­agree­ments over Iran and Trump’s de­ci­sion to break with other gov­ern­ments and re-im­pose sanc­tions over the coun­try’s nu­clear de­vel­op­ment.

China ob­jects to uni­lat­eral sanc­tions out­side the United Na­tions. China has said it will con­tinue to do busi­ness with Iran de­spite the pos­si­ble threat of U.S. penal­ties.

Meng is a prom­i­nent mem­ber of China’s busi­ness world as deputy chair­man of Huawei’s board and the daugh­ter of its founder Ren Zhengfei.

De­spite that, her ar­rest is un­likely to de­rail trade talks, said Willy Lam, a pol­i­tics spe­cial­ist at the Chi­nese Univer­sity of Hong Kong.

“I think too much is at stake for Xi Jin­ping. He des­per­ately wants a set­tle­ment,” said Lam.

How­ever, the case will re­in­force Chi­nese ur­gency about de­vel­op­ing do­mes­tic tech­nol­ogy sup­pli­ers to re­duce re­liance on the United States, said Lam.

Trump has “pulled out all the stops” to ham­per Chi­nese am­bi­tions to chal­lenge the U.S. as a tech­nol­ogy leader, Lam said. That in­cludes lim­its on visas for Chi­nese stu­dents to study science and tech­nol­ogy.

“If the Chi­nese need fur­ther con­vinc­ing, this case would show them be­yond doubt Trump’s com­mit­ment,” said Lam.

Meng

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