Huawei Executive Arrest Shows US-China Trade War Far From Over - Pundit

© AFP 2023 / NICOLAS ASFOURIMagazines featuring front pages of US President Donald Trump (L) and China's President Xi Jinping (R) are displayed at a news stand in Beijing
Magazines featuring front pages of US President Donald Trump (L) and China's President Xi Jinping (R) are displayed at a news stand in Beijing - Sputnik International
Beijing has urged Canada and the US to “clarify” the reasons for the arrest of Huawei's Chief Financial Officer Meng Wanzhou was arrested in Vancouver, Canada. The arrest took place on the 1st of December.

Canada’s Department of Justice has confirmed the date and the time of the arrest and said that a bail hearing is set for Friday. It also said that Ms Meng had sought a ban on the publication of details surrounding the case. The United States has been investigating Huawei over alleged violations of sanctions against Iran.

It was reported that Ms Meng, who is the daughter of the company’s founder, is sought for extradition by the US. Officials in the US said in the past that Huawei’s technology could be used for spying, and accused the company of being a threat to US national security. A sharp decline in technology shares has dragged down benchmark stock indexes in China and Hong Kong following Ms Meng's arrest.

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Sputnik has discussed the arrest of Huawei’s Chief Financial Officer Meng Wanzhou with Dr Oh Ei Sun, Senior Advisor for International Affairs at the Asian Strategy and Leadership Institute in Kuala Lumpur.

Sputnik: What is your take on the timing of this arrest?

Dr Oh Ei Sun: Well, I think, number one, I think of course now is this ongoing sort of trade war between the United States and China even though it supposed to sort of rest for a while but still I think the US is sort of revving up the pressure on China because one of the items the United States accused China of not doing very well is of course of this protection of intellectual properties and so on.

But I think there is also another reason that the United States is also trying to keep sort of the issue on Iran sort of alive. So it is like killing two birds with one stone, here.

Security personnel stand near a pillar with the Huawei logo at a launch event for the Huawei MateBook in Beijing, Thursday, May 26, 2016 - Sputnik International
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Sputnik: But is it very interesting that you know we just had Donald Trump meeting with Xi Jinping and saying that only the two of them were capable of creating a good international atmosphere for trade and resolving other problems. Donald Trump said that the relationship between China and the US took a huge step forward and here we have this arrest in Canada with a US request to extradite Ms Meng. Do you think this is related at all to this?

Dr Oh Ei Sun: Of course, the timing would suggest some sort of connection and after all President Trump has always been changing his mind, sometimes the very next day after he promised to do or not to do something.

But, yes, I think that the US is really keeping the pressure up because this sort of a truce of the trade war is not really like they have a ceasefire. Because I think the US is threatening to re-impose the higher tariff in three months’ time instead of in January, yes.

Sputnik: What do you make of the actual accusations that Huawei was in violation of sanctions against Iran? Do you think that is likely?

Dr Oh Ei Sun: You see the sanctions against Iran, there are those which are UN-related but they are also which are sort of unilaterally imposed by the United States.

I think for those which are unilaterally imposed by the United States, many other companies from other countries including those from China and sometimes from other countries also, they would still continue to do business with Iran. So, well we have to wait for the details as to what are the actual allegations.

Sputnik: So far China has asked that there be a clarification of the reasons for the arrest. I guess that we are waiting for that. Has this gotten a lot of publicity in the Asian region and what consequences has this had so far for Huawei?

Security personnel stand near a pillar with the Huawei logo - Sputnik International
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Dr Oh Ei Sun: Well, number one, it does generate a lot of attention, media attention in Asia. And Huawei is sort of like a flagship of China’s mobile phone industry. So then there are a lot of users in the region of Huawei phones and so on. So, yes, I mean it is sort of a big piece of news item here.

Sputnik: How has that arrest affected the price of Huawei shares, for instance, or, you know, the actual company?

Dr Oh Ei Sun: I have yet to see the effect on Huawei’s shares but I think an event such as this, I mean with the CFO and the daughter of the founder being arrested, it is likely to take a hit here.

Sputnik: Did the US previously have a lot of problems with Huawei and the way Huawei was operating? I mean the US has been talking about all of this property right, I mean have there been beefs with Huawei previously?

Dr Oh Ei Sun: Well, I think earlier this year there was already various allegations of Huawei, I think, doing business with Iran, transferring some technology and so on. But the United States I think they sort of backed off after confrontations between President Trump and President Xi Jinping.

And the United States, I think, imposed a hefty fine but did not pursue further. So this is, in a sense, an escalation of sort of that previous allegation.

Sputnik: How is this going to affect US-China relations? And of course, the talks that are supposed to be continuing  we are supposed to see. You know, there has been a temporary secession of additional tariffs and so forth, so we have had this temporary sort of easing of tensions on the trade front and there are to be now negotiations to resolve all of the other issues within the next 90 days. And I am just wondering, I mean how is this event going to play out as far as, you know, how China is going to come to these talks?

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Dr Oh Ei Sun: Well, the United States and China, being the world’s two largest economies, they cannot afford to not talk to each other. So, yes, this is going to affect the relationship a little bit, but really a little bit because whether this happens or not the trade talks will have to continue because this is simply too large a volume to be left in sort of a limbo.

Sputnik: But is China in a better or worse position now after this arrest? It seems that they are going to have to, you know, they are going to obviously want to know what is going with this. I can imagine this will have an impact on shares in Chinese technology companies, not just Huawei probably?

Dr Oh Ei Sun: Yes, but Huawei in a sense is a private company.

I think from China’s side the pay a lot of attention to those state-owned enterprises. Huawei, although as big as it is, is a private company. So, in a sense, yes, the Chinese do pay a lot of attention to this but perhaps not as big as, let’s say, when one of the state-owned enterprises is similarly accused.

Views and opinions expressed in this article are those of Dr Oh Ei Sun and do not necessarily reflect those of Sputnik.

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