Published: Fri, December 07, 2018
Markets | By Otis Pena

Trudeau says he had advance notice of Huawei executive's arrest

Trudeau says he had advance notice of Huawei executive's arrest

The main catalyst for the continuation of this week's selloff was the arrest in Canada of Sabrina Meng Wanzhou, the chief financial officer of Huawei and the daughter of company founder Ren Zhengfei. A spokesman for the US Attorney's office in Brooklyn, which Reuters has reported is investigating Huawei, declined to comment.

China could "take hostages" and is nearly certain to retaliate against the United States, experts say, after the stunning arrest of a top Chinese tech executive for allegedly trying to skirt sanctions on Iran.

EMBATTLED CHINESE tech giant Huawei has received another blow, after its Chief Finance Officer (CFO) Meng Wanzhou was arrested in Canada.

Huawei, the biggest global supplier of network gear used by phone and internet companies, has been the target of deepening U.S. security concerns.

US National Security Adviser John Bolton has also said he knew about the arrest in advance.

Other nations are increasingly being forced to choose between Chinese and USA suppliers for next-generation " 5G" wireless technology.

Huawei, the world's biggest network equipment maker ahead of Ericsson and Nokia, has said Beijing has no influence over its operations. Meng was detained in Canada on Saturday, the same day Trump sat down over a steak dinner to hash out an oral agreement with Xi in Buenos Aires.

The arrest is related to violations of USA sanctions, a person familiar with the matter said, though officials have so far stayed mum on her allegations.

USA markets were closed on Wednesday because of the funeral of former President George H.W. Bush but resumed their downward move on Thursday following the Meng arrest.

That includes theft of USA intellectual property by Chinese actors and forced technology transfers from United States companies to Chinese partners in joint ventures, he said.

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

Trump's tariff hikes on Chinese imports stemmed from complaints Beijing steals or pressures foreign companies to hand over technology.

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

United States lawmakers have repeatedly accused the company of being a threat to USA national security, arguing that its technology could be used for spying by the Chinese government.

US authorities have been probing Huawei since at least 2016 for allegedly shipping USA -origin products to Iran and other countries in violation of USA export and sanctions laws, sources told Reuters in April.

In exchange, ZTE agreed to pay a hefty $1 billion fine and put an additional $400 million in escrow in case of future violations. The tech company said it complies with all laws and rules where it operates.

Both Huawei and ZTE have not only been barred from use by USA government agencies and contractors; they have also been mostly locked out of the American market.

"It really speaks to the depth of the Chinese concern in their economies and their desire to get the US-China relationship back on a more even keel", said Elizabeth Economy, a senior fellow at the Council on Foreign Relations.

And almost a year ago, AT&T pulled out of a deal to sell Huawei smartphones.

United States national security officials have said Huawei poses a security risk due to its alleged close links to the Chinese government. They urged him to keep Huawei off Canada's next- generation network.

"China firmly opposes all forms of cyber attack and cracks down on them in accordance with law", he furthered.

She also said she was married with a son and a daughter and that her husband did not work in the industry.

But hours later, Huawei released a statement on its official Weibo account, not only confirming the arrest but revealing more information. "We're not going to deal that away in 90 days". A new law in China requiring any domestic firm to assist the government when asked has also stoked concern.

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