Update 8.10am: China has demanded Canada release a Huawei Technologies executive who was arrested in a case that adds to tensions with Washington and threatens to complicate trade talks.
Huawei’s chief financial officer, Meng Wanzhou, faces possible extradition to the United States, according to Canadian authorities. The Globe and Mail newspaper, citing law enforcement sources, said she was accused of trying to evade US curbs on trade with Iran.
The timing is awkward following the announcement of a US-Chinese ceasefire in a tariff war over Beijing’s technology policy. Meng was detained in Vancouver on Saturday, the day Presidents Donald Trump and Xi Jinping met in Argentina and announced their deal.
Asian stock markets tumbled on the news, fearing renewed US-Chinese tensions that threaten global economic growth. Market indexes in Tokyo and Hong Kong fell by 1.9% and 2.8% and Shanghai was off 1.7% at midday.
The Chinese Embassy in Ottawa said Meng broke no US or Canadian laws and demanded Canada “immediately correct the mistake” and release her.
“The Chinese side expresses firm opposition and strongly protests this serious violation of human rights,” said an embassy statement. Huawei Technologies Ltd, the biggest global supplier of network gear used by phone and internet companies, has been the target of deepening US security concerns.
Washington has pressured European countries and other allies to limit use of its technology. The US sees Huawei and smaller Chinese tech suppliers as possible fronts for Chinese spying and as commercial competitors that the Trump administration says benefit from improper subsidies and market barriers.
Trump’s tariff hikes this year on Chinese imports stemmed from complaints Beijing steals or pressures foreign companies to hand over technology. But American officials also worry more broadly about Chinese plans for state-led industry development they worry might erode US industrial leadership.
US leaders also worry that Beijing is using the growth of Chinese business abroad to gain strategic leverage. “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 the most successful Chinese companies, “will trigger anti-US sentiment in China”. “The incident could turn out to be a breaking point,” Zhu said
Last month, New Zealand blocked a mobile phone company from using Huawei equipment, saying it posed a “significant network security risk”.
In August, Australia banned the company from working on the country’s fifth-generation network due to security concerns. Meng was changing flights in Canada when she was detained “on behalf of the United States of America” to face “unspecified charges” in New York, according to a Huawei statement.
“The company has been provided very little information regarding the charges and is not aware of any wrongdoing by Ms Meng,” the statement said. A US Justice Department spokesman declined to comment.
Meng is a prominent member of China’s business world as deputy chairman of Huawei’s board and the daughter of its founder Ren Zhengfei, a former Chinese military engineer.