Huawei founder’s daughter arrested on US request, puts trade war truce in doubt

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The daughter of Huawei's founder and its top executive was arrested in Canada and faces extradition to the United States, stirring up fears of reigniting US-China trade war.
Meng Wanzhou is facing potential extradition to the US as American authorities investigate the company for potential violations of Iran sanctions. PHOTOS: HUAWEI, REUTERS

WASHINGTON - A top executive and daughter of the founder of Chinese telecom giant Huawei faces extradition to the United States after her arrest in Canada, the development sparking tensions and rattling markets Thursday (Dec 6), just days after China and the US called a truce on their trade war.

Ms Meng Wanzhou, Huawei's chief financial officer, was detained in Vancouver on Dec 1, while on transit.

Canada's Ministry of Justice said in a statement that the US is seeking her extradition and that she faces a bail hearing on Friday. It could not give further details due to a publication ban sought by Ms Meng.

China has acted swiftly to lodge solemn representations with Canada and the US on the matter.

"We have asked both countries to immediately clarify the reasons for the detention, immediately release the detainee and protect the person's legal rights," Chinese Foreign Ministry spokesman Geng Shuang said at a regular press briefing on Thursday.

The arrest is believed to be related to suspected violations of Iran sanctions by Huawei, which has been heavily scrutinised by the US authorities over security concerns.

This comes after another Shenzhen-based telecom giant ZTE was nearly forced out of business earlier this year for breaking Iran sanctions.

The US government cut the mobile phone maker's access to American suppliers, only to lift the ban after Chinese President Xi Jinping made a direct request to US President Donald Trump.

While the US Justice Department had declined to comment, Republican Senator Ben Sasse praised the arrest, saying in a public statement: "China is working creatively to undermine our national security interests, and the United States and our allies can't sit on the sidelines."

The Chinese company maintains it has not broken any laws.

"Huawei complies with all applicable laws and regulations where it operates, including applicable export control and sanction laws and regulations of the UN, US and EU," it said in a statement.

China-US expert Chen Qi told the Beijing News that though details surrounding the arrest have yet to be clarified, it was easy for people to link it to foreign intentions to make things difficult for Huawei.

"Huawei is exporting its 5G products, and has met with opposition and warnings in the US, Europe, Australia and New Zealand," said the resident scholar at the Car- negie-Tsinghua Center for Global Policy. "Coupled with the competition between China and the US in the race to be a global technology power, (it shows ) the US has intentions to attack China's high-tech products."

Asian markets were rattled by the news, which triggered a sell-off in technology stocks, among them Huawei partners and suppliers.

Shanghai closed 1.68 per cent lower, while Shenzhen fell 2.17 per cent and Hong Kong lost 2.47 per cent by the end of the trading day.

Ms Meng's arrest was also widely reported by the local media on Thursday and by mid-day it was a trending topic on social media.

Many netizens called the US "bandits" and left angry comments on the social media accounts of the American and Canadian embassies.

Global Times editor Hu Xijin also took to social media to hit back at the US. He warned the US against using "despicable rogue means" to fix Huawei.

"The US is obviously taking the war to our doorsteps, with no regard for decorum. We totally can view the arrest of Meng Wenzhou by the US as a declaration of war on China," he wrote.

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