Rise in US-China tensions after Canada arrests Huawei exec

SHANGHAI (The Straits Times/ANN) - Daughter of founder faces extradition to US; detention could be related to suspected violations of Iran sanctions

A top executive and daughter of the founder of Chinese telecoms giant Huawei faces extradition to the United States after her arrest in Canada.

The development has sparked tensions and rattled markets 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 last Saturday while in transit.

Canada's Ministry of Justice said in a statement that the US is seeking her extradition, and that she faces a bail hearing today. 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 media briefing yesterday (Dec 6).

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 telecoms 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 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 that 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 Carnegie-Tsinghua Centre 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 yesterday and by midday, 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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