China de­mands Canada re­lease Huawei ex­ec­u­tive

Chief fi­nan­cial of­fi­cer faces pos­si­ble ex­tra­di­tion to U.S.

The Mercury News Weekend - - BUSINESS - By Joe McDon­ald and Rob Gil­lies

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 fi- nan­cial of­fi­cer of Huawei Tech­nolo­gies, faces pos­si­ble ex­tra­di­tion to the United States, ac­cord­ing to Cana­dian au­thor­i­ties. 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. Un- der 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 tech 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 an- nounce­ment 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 he knew of the pend­ing ar­rest in ad­vance. He de­clined to talk about the specifics of the case and said he didn’t know if Trump knew about be­fore it hap­pened but added 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.

Cana­dian Prime Min­is­ter Justin Trudeau said he was given a few days ad­vance no­tice of the in­ten­tion of Cana­dian au­thor­i­ties to ar­rest her but said it was the de­ci­sion of law en­force­ment and there was no po­lit­i­cal in­ter­fer­ence.

“I can as­sure ev­ery­one that we are a coun­try of an in­de­pen­dent ju­di­ciary and the ap­pro­pri­ate au­thor­i­ties took the de­ci­sions in this case without any po­lit­i­cal in­volve­ment or in­ter­fer­ence,” Trudeau said.

He also said he could not com­ment fur­ther be­cause of a pub­li­ca­tion ban. A spokesman for Canada’s jus­tice de­part­ment said Meng re­quested the ban and the de­part­ment could not com­ment fur­ther.

Stock mar­kets tum­bled on the news, fear­ing re­newed U. S.- Chi­nese ten­sions that threaten global eco­nomic growth. Hong Kong’s Hang Seng lost 2.5 per­cent and the DAX in Ger­many sank 1.8 per- cent. In the U. S., stocks knocked more than 780 points off the Dow Jones In­dus­trial Av­er­age be­fore the Dow ral­lied to fin­ish just 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.

Bei­jing asked Wash­ing­ton and Ot­tawa to ex­plain the rea­son for Meng’s ar­rest, said a For­eign Min­istry spokesman, Geng Shuang. He said ar­rest­ing her without that vi­o­lated her hu­man rights.

But the Min­istry of Com­merce sig­naled that Bei­jing wants to avoid dis- rupt­ing 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 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.

“The United States is step­ping up con­tain­ment of China in all re­spects,” said Zhu Feng, an in­ter­na­tional re­la­tions ex­pert at Nan­jing Uni­ver­sity. He said tar­get­ing Huawei, one of its most suc­cess­ful com­pa­nies, “will trig­ger an­tiU. S. sen­ti­ment.”

“The in­ci­dent could turn out to be a break­ing point,” Zhu said..


Huawei, the big­gest global sup­plier of net­work gear used by phone and in­ter­net com­pa­nies, has been the tar­get of deep­en­ing U.S. se­cu­rity con­cerns. The U.S. sees Huawei and smaller Chi­nese tech sup­pli­ers as pos­si­ble fronts for spy­ing.


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