BEIJING – China convened Thursday for the immediate release of a senior executive at Huawei Technologies, the world's largest producer of telecommunications equipment, amid fears that his arrest in Canada could break the fragile truce in the commercial war between Beijing and Washington.
Meng Wanzhou, chief financial officer of Huawei and daughter of the founder of Huawei, will appear in court on Friday for a bail hearing after he was arrested in Vancouver while he was changing planes on Saturday.
Meng was arrested at the request of the United States because Huawei is suspected of attempting to circumvent the US sanctions against Iran, according to various reports. US prosecutors have been investigating since 2016 whether Huawei has violated US export laws and sanctions by shipping products from the US origin to Iran.
The arrest, which occurred on the same day that President Trump and the Chinese Xi Jinping sat down for dinner together in Buenos Aires to negotiate a way out of their commercial war, is seen in China as politically motivated .
The United States is "resorting to despicable hooliganism," wrote the Nationalist Global Times in an editorial published Thursday. "Anyone can see that the United States is mischievously identifying holes in Huawei, trying to give them problems using the American legal system," said the newspaper, which often reflects the foreign policy views of the ruling Communist Party.
The "persecution" of Huawei is "clearly contrary to the spirit of consensus" forged between Trump and Xi, he said. The two sides are now entering into negotiations to try to find a way out of the "tit-for-tat" tariff war within 90 days set by Trump.
The arrest added to the commercial jitters that dragged down world markets last week. The main trade in Asia and Europe fell sharply on Thursday.
American analysts were also surprised by Meng's arrest.
"My jaw dropped when I saw this news," said James McGregor, president of the large region of China for APCO Worldwide, a business consulting firm. "This is so different from everything we've seen before. Serious legal action taken with political times".
The Ministry of Commerce is trying not to let Meng stop the trade negotiations. "The Chinese and US commercial teams are now in perfect communication and good cooperation," said spokesman Gao Feng. "We are confident that China and the United States can reach an agreement within 90 days".
But at the Ministry of Foreign Affairs, spokesman Geng Shuang said the Chinese government made "solemn" and "solemn" statements to both the US and Canada for the arrest of Meng.
"We asked them to clarify the reasons for their detention, to release the detainee and seriously safeguard the legal and legitimate rights and interests of the person involved," said Geng.
The investigation on Huawei seems similar to a previous case against ZTE Corp., another Chinese telecommunications equipment company, which last year pleaded guilty to violation Sanctions for export to the United States I came across.
ZTE was initially placed on the black list in the United States, a move that took him to the edge of bankruptcy. But after Trump's intervention, this was downgraded to $ 892 million fine and outside of the monitoring of its business activities.
But no one has been arrested or arrested in the ZTE case, and Huawei has not been formally accused of violating sanctions.
More than almost any other company, Huawei has come to symbolize the potential and threat of a growing China. It has quickly become one of the pillars of the new high-tech economy supported by Xi, which aspires to China to become the world leader in high-tech manufacturing.
Huawei employs 180,000 people in around 170 countries and earned $ 92.5 billion last year. It is the third largest smartphone seller in the world, after Apple and Samsung, and plans to sell 200 million phones this year.
But the Shenzhen-based company has also become synonymous with a darker side of Chinese growth, based on suspicion that it has ties to Chinese military or security services.
United States, Great Britain, Australia and New Zealand – four of the five countries of the "Five Eyes" intelligence sharing network, and the other is Canada – have blocked Huawei from their networks for security reasons.
The suspicions about espionage are based on the fact that Huawei was founded by a man who spent about 20 years in the People's Liberation Army, including reportedly serving in a military division.
Some analysts have questioned the timing of the arrest, if not the substance.
"There may be a legal basis for this, but politically, times are corrosive," said James Zimmerman, former head of the American Chamber of Commerce in China. "We are in the middle of some very sensitive and tense negotiations, and they are doing something that is unprecedented in forty years of relations between the United States and China."
In the past, China reacted quickly against similar types of actions. The question now is whether Beijing will react this time and risks triggering a new battle in the commercial war.
"I've never seen China take anything like that lying down," said McGregor, who has lived in China for nearly three decades. "For now, China seems to be taking a measured approach, but this could get ugly very quickly."
Yang Liu and Lyric Li contributed to this relationship.
Between the commercial war and the spy declarations, the CEO of Apple lights up the charm in China