Published: Fri, December 07, 2018
Money | By Ethel Goodwin

China's Huawei finance chief arrested in Canada, faces extradition to US

China's Huawei finance chief arrested in Canada, faces extradition to US

Stocks across the globe have fallen sharply joining a global stocks sell-off after the arrest of a key Chinese Huawei executive at Washington's request revived worries over trade tensions.

US lawmakers have urged Prime Minister Justin Trudeau to block Huawei from 5G in Canada. Washington and Beijing are locked in a clash over which of the world's two largest economies will command economic and political dominance for decades to come.

"This is usually the kind of move China does", says McGregor. "Oh my God, where is this going to lead?"

Meng, who was collared by Canadian authorities at Vancouver airport, is now facing extradition to the USA, where she will, it is believed, face allegations she broke sanctions on selling equipment to Iran. A Canadian Justice Department spokesman acknowledged Wednesday that law enforcement took her into custody at the request of the USA, which is seeking her extradition for allegedly violating its sanctions on Iran.

Rubio slammed the company as an arm of the Chinese government that he said is used to spy on other governments, calling for the extradition of Wanzhou to the U.S.

The British bank HSBC is cooperating with US authorities in its investigation, people familiar with the matter said Thursday.

Donald Trump last month reinstated all the USA sanctions on Iran that had been removed under a 2015 nuclear deal.

Australia and New Zealand have effectively banned Huawei gear from the latest generation of their mobile networks while others such as the United Kingdom and Germany may follow suit due to worries it could be outfitted to spy on their host nations.

Under Trump and his predecessor, Barack Obama, Washington has pressured European countries and other allies to limit use of Huawei's technology. The 46-year-old was arrested by Canadian authorities in Vancouver on Saturday.

China urged Canada and the United States to "clarify" the reason for Meng's arrest and demanded her release.

In 2011, the American government stopped Huawei from purchasing US server technology company 3Leaf's assets, for national security reasons.

New Zealand has blocked Huawei equipment over national security concerns, after Australia imposed a similar ban on both Huawei and fellow communications firm ZTE.

However, according to analysts, this arrest will offset any optimism after the G20.

The volatility put a spotlight on doubts about Trump's ability to deliver on his promises with China - and exposed a clash between his policy goals in China and his efforts to crack down on technology companies and other actors.

In addition to Trump's tariffs, the administration is tightening regulations on high-tech exports to China.

In 2016, the Commerce Department made documents public that showed ZTE's misconduct and also revealed how a second company, identified only as F7, had successfully evaded US export controls.

US authorities also subpoenaed Huawei in 2016 seeking information related to possible export and sanctions violations, sources have said.

Traders said the development smashed hopes surrounding the trade war ceasefire announced by President Trump after talks with his Chinese counterpart at the weekend. After ceasing major operations as a result, ZTE paid another $1 billion as part of a deal to get the ban lifted.

The Chinese tech giant released a statement saying it is unaware of any wrongdoing by Meng. He said targeting Huawei, one of its most successful companies, "will trigger anti-U.S. sentiment".

But suspicions persist. Concern now centres on the deployment of fifth-generation (5G) mobile networks, where Huawei is at the cutting edge.

"And they took this decision without any political involvement or interference".

And almost a year ago, AT&T pulled out of a deal to sell Huawei smartphones. Mark Warner, D-Va., and Marco Rubio, R-Fla., wrote in October to Canadian Prime Minister Justin Trudeau. "They may see that Canada has to do this, and the Canadian investment relationship is important".

A profile of Huawei's chief financial officer Meng Wanzhou is displayed on a Huawei computer at a Huawei store in Beijing, China, Dec. 6, 2018.

"The threat from these companies lies in their access to critical internet backbone infrastructure", she said. Huawei has denied the links. Her stature in Chinese culture has been compared to American tech giants such as Steve Jobs or Mark Zuckerberg.

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