US charges against Huawei, Meng Wanzhou cast pall on trade talks with China

US Secretary Treasury Steven Mnuchin reiterated Tuesday that the charges levied against Chinese telecom giant Huawei, its subsidiaries, and CFO Meng Wanzhou are not part of the Trump Administration's attempt to sway trade talks with Beijing.
Chinese technology giant Huawei says it "is not aware of any wrongdoing" by its chief financial officer Meng Wanzhou.
Chinese technology giant Huawei says it "is not aware of any wrongdoing" by its chief financial officer Meng Wanzhou.

China accuses US of political manipulation, but both downplay any impact on meeting

China has accused the United States of "political manipulation" after prosecutors on Monday brought criminal charges against Huawei and its chief financial officer Meng Wanzhou for allegedly conspiring to violate US sanctions on Iran.

The lawsuit will cast a pall over a second round of trade talks starting today in Washington. The US aims to pin China down on forced technology transfer and intellectual property theft, among other things, during the two-day meeting.

In a strongly worded statement - released hours after the US Justice Department charged the Chinese technology giant and Meng with defrauding banks to evade sanctions on Iran and stealing trade secrets from an American competitor - Chinese Foreign Ministry spokesman Geng Shuang urged the US to "stop unreasonable suppression of Chinese companies", saying China will resolutely defend the legitimate rights and interests of its enterprises.

"For some time, the US has used state power to discredit and crack down on specific Chinese companies in an attempt to stifle the legitimate operations of enterprises. There are strong political attempts and political manipulation behind them," Mr Geng said yesterday.

He also urged the US to revoke Meng's arrest warrant and Canada to release her immediately. Meng is out on bail in Vancouver pending a court hearing next week.

The charges are part of a broader crackdown on Huawei over fears that its technology is being used to spy on the US and others, and over larger unhappiness that China is competing unfairly in the global economy by stealing trade secrets from Western companies.

But in China, the charges are viewed and painted as US attempts to suppress its technological rise.

 
 
 
 

US officials stressed that the charges against Huawei and Meng are separate from the high-stakes talks with China.

"They are a totally separate process. The negotiations on the trade front will continue to be ongoing," White House press secretary Sarah Sanders said at a briefing.

China also downplayed the impact the legal wranglings might have on the talks, saying both sides should work together to bring to fruition the consensus reached between US President Donald Trump and Chinese President Xi Jinping last month.

But analysts believe otherwise.

"The trade talks are not just about trade, investments, goods and services or market access. More importantly, they are also about US-China competition over technology. This issue is part and parcel of that tech war between the two countries," said Associate Professor Li Mingjiang, coordinator of the China programme at the S. Rajaratnam School of International Studies.

"No matter what the Americans say, the Chinese will link the issue with their tech rivalry and believe the US government and legal institutions are doing all this simply for the purpose of curbing China's tech advancement."

Meng's arrest in Vancouver on Dec 1 last year, at the request of the US, sparked a diplomatic row. The US authorities, who have filed a formal extradition request, stressed that the charges were allegations, and that the defendants were presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Huawei rejected the accusations, saying it was disappointed to learn of the charges brought against it.

"The company denies that it or its subsidiary or affiliate has committed any of the asserted violations of US law set forth in each of the indictments," a Huawei spokesman told The Straits Times in a statement, adding that Huawei "is not aware of any wrongdoing by Ms Meng, and believes the US courts will ultimately reach the same conclusion".

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A version of this article appeared in the print edition of The Straits Times on January 30, 2019, with the headline 'US charges against Huawei, Meng cast pall on trade talks'. Print Edition | Subscribe