Arrest of Huawei Executive Puts the US-China Trade War in More Crisis

Arrested in Canada and under a Washington extradition request, Huawei's chief financial officer and vice president is the daughter of founder Ren Zhengfei. And the granddaughter of a former vice governor of Sichuan Province.

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She was arrested on December 1, but the news only rebounded on the agencies in the late evening of Dec 5, after the indiscretion launched by the Canadian newspaper Globe and Mail. From there Meng Wanzhou, stopped in Vancouver, with a warrant issued by the United States, immediately became a diplomatic case.

A real earthquake that is putting a strain on the already precarious trade and political balance between China and the United States. After all, such an arrest, with a Chinese executive of this caliber at the center is rare or perhaps unprecedented.

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More tension in making

According to the Canadian newspaper Globe and Mail, without citing its sources, Washington accuses Meng of having “attempted to circumvent the US embargo against Iran.”

In a statement, Huawei reports that Ms. Meng faces “unspecified charges” by the New York justice and that she was in correspondence between two planes in Vancouver. “The company has received very little information about the charges and is not aware of any crimes committed by Ms. Meng,” it continues.

Huawei, which says it trusts Canadian and US judicial institutions, says it “complies with all the laws and regulations [of the countries] in which it operates, including export control and sanctions laws.”

How has China responded?

Beijing, on the other hand, has adopted a much less diplomatic tone. “The Chinese side firmly opposes and strongly protests against such actions that are a serious violation of human rights of the victim”, said the Chinese embassy in Canada. Calling for the immediate release of Ms. Meng, the ambassador, Lu Shaye, canceled the visit that he was to perform Thursday, along with four Chinese parliamentarians, to Parliament in Ottawa.

China on Thursday (December 6th) demanded explanations from Washington and Ottawa after the arrest, at the request of the United States, of the financial director of telecommunications giant Huawei.

“We are demanding from both sides that clarification is provided as soon as possible as to the reason for this detention,” said Geng Shuang, spokesman for the Chinese Foreign Ministry, again calling for the “immediate” release of Meng Wanzhou.

But who is really Meng Wanzhou?

Who is really Meng Wanzhou? And why is not it simply the daughter of Huawei’s founder, Ren Zhengfei? These are two of the key questions of this story. A story that could have unpredictable consequences, with Beijing and Washington far away.

Meng Wanzhou, 46, is very private about her very secret life. She studied as an accountant and received a master’s degree in management from the Huazhong University of Science and Technology.

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Today she is the mother of two children, but she is also the financial director and vice president of one of the most powerful companies in the world – Huawei, the Chinese colossus founded by her father in 1988. She joined the company in 1993 and has held the post of director of the international accounting department, CFO of Huawei Hong Kong and chairman of the accounting management department.

Since 2007, and for eight years, Wanzhou has been responsible for the transformation program for integrated financial services (a partnership between Huawei and IBM). Currently, as mentioned she is Huawei’s CFO.

Huawei’s dominance in networks

Today, the Shenzhen-based company is a leading player in the smartphone market and the second largest manufacturer in the world, after the Korean Samsung, with a sales forecast of 200 million devices in 2018.

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Huawei is also the undisputed leader in the network infrastructure sector, with orders all over the world. Precisely this position has caught the eyes of Trump administration and Trump’s accusations on cybersecurity and the invitation that the American president has made to all the allied countries not to use Huawei networks for national infrastructures.

The most powerful woman of the Chinese tech

Meng, who in the West calls herself Sabrina and the surname Wanzhou took from her mother, is a CFO of an empire that employs 180,000 people with over $4 billion of revenues in the first half of 2018. The figures and tasks that perfectly outline the profile of what is considered by many to be the most powerful Chinese woman in the world of technology.

The future of Meng seems already written that it will be her to succeed his father, Ren Zhengfei, to the position of CEO of Huawei. It is worth mentioning that Zhengfei, the founder of Huawei, is a former engineer of the People’s Liberation Army, a charge that over the years has always given rise to the international chatter that hovers over Huawei. The hypotheses of control that the Beijing government would have on the Shenzhen multinational technology are a story never ceased.

Meng Wanzhou, currently under arrest for the United States, is a Chinese citizen but holds a Hong Kong passport, like his father. In the past, he had said that he won a very important scholarship to study abroad, but that the Beijing government had denied the visa, considering it at risk emigration.

Blow to diplomatic relations

If there was a need for proof that the truce between Donald Trump and Xi Jinping reached at the G20 in Buenos Aires was precarious and uncertain, here it is after the arrest. The arrest of Meng Wanzhou, daughter of the company’s founder, is likely to increase tensions between the US and China in the technology field, following the recent tariff truce. Friday is scheduled for the hearing in which the judge will decide whether to release her on bail.

To make it even more incandescent, this story is the accusation – violation of sanctions against Iran. It seems that these are not the most recent sanctions, those reintroduced by the Trump Administration after the denunciation of the nuclear agreement.

That nuclear pact remains valid for all other signatory nations, from China to Russia to the European Union. But Huawei was suspected of circumventing sanctions since 2016, and in this case, the violation would refer to an embargo regime recognized by the international community.

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The Wall Street Journal revealed in April that the US Justice Department had opened an investigation into whether Huawei had violated the US embargo against Iran. Founded by a former Chinese army general, the company is regularly accused by Westerners of spying for Beijing.

In addition, the company is in direct competition with western market, such as Nokia and Ericsson, to implement 5G technology, which should begin to replace the current 4G by 2019. This technology will also support innovations such as autonomous car or telemedicine.

The United States, who have already managed to convince Australia and New Zealand not to resort to Huawei, for reasons of national security, would currently press the Europeans to take the same position. France must decide on the allocation of 5G frequencies in 2019.

On the Chinese social networks, the arrest of the daughter of the founder of Huawei was quickly at the top of the most debated topics Thursday morning. Internet users are increasing criticism of Canada and the United States.

Although the United States has imposed customs sanctions against Chinese imports since July, many observers believe that the main fear of the United States is in fact China’s technological advance in a number of sectors, including telecommunications. using means that do not comply with the rules of international trade. Huawei is one of the most iconic examples of this now contested success.

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