BEIJING – Although angry at the arrest of a senior executive of Huawei Technologies at the behest of the United States, China will try to contain the consequences and prevent it from being a negotiated solution to the trade war, analysts said Friday.
The unusual arrest has injected a new element of doubt in the efforts to solve the trade war between the two major economies of the world and triggered the turbulence of the stock markets in the United States and Europe.
"The Huawei case will definitely have a negative impact on US-China political trust," said Wang Yong, a professor at Beijing's international university school of studies.
Meng Wanzhou, financial director of Huawei Technologies and daughter of the company's founder, was arrested in Vancouver on Saturday – the same day that President Trump and his Chinese counterpart, Xi Jinping, accepted a truce in the commercial war.
The United States is trying to extradite it, apparently in connection with allegations that Huawei, the world's largest telecommunications network equipment manufacturer, has violated US export sanctions on Iran.
The Chinese government has demanded its immediate release, while local newspapers have said that the United States is targeting Chinese technology companies because they are competing successfully with American rivals.
But analysts do not expect Beijing to increase the incident.
"The Chinese side should be careful and should not exaggerate the issue" and Huawei's case should not be allowed to precipitate wider talks, Wang said. "I believe President Trump and US companies, including American investors in China, hope that China and the United States can reach an agreement."
Huawei, the world's second largest smartphone maker, is one of the pillars of Xi's new high-tech economy. But its very survival could now be questioned.
A previous case against ZTE Corp., another Chinese telecommunications giant accused of violating US export sanctions on Iran, brought it to the brink of bankruptcy last year. ZTE was initially placed on the blacklist in the United States, but after Trump's intervention was downgraded to a fine of $ 890 million.
Although the United States has not formally announced charges against Huawei, the cases seem similar.
"China has more incentives than the United States to stop the escalation," said Yanmei Xie, an analyst at the consulting firm Gancal Dragonomics in Beijing. "The Chinese priority is to prevent the United States from launching paralyzing sanctions against Huawei, if the United States does what it did to ZTE, there is very little China that can do to stop Huawei from collapsing, and this it is not in China's interest. "
For this reason, China would try not to "provoke" the United States, he said.
Some analysts have expressed the fear that China may try to take revenge by arresting an American technical leader. But Foreign Ministry spokesman Geng Shuang said on Friday that China would not.
"China always protects the legitimate rights and interests of foreigners in China in accordance with the law, but I think they certainly should also abide by Chinese laws and regulations," said Geng.
Meng's arrest feeds a broader feeling that the trade war is not just about imports and exports, but also about the Trump administration's efforts to contain China and halt its rise.
"The United States is trying to do everything possible to contain Huawei's expansion in the world simply because the company is the benchmark for China's competitive technology companies," the state Daily newspaper said in an editorial. Friday.
For the good of the world – and for the American economy – the United States should "change the mentality towards China," the newspaper said.
The People & # 39; s Daily, the spokesman for the Communist Party, has painted the travails of Huawei as part of an 'epic battle.
"All the slingshots and arrows have not prevented it from growing or preventing it from turning into a global telecommunications equipment giant," he said, adding that Chinese companies are gaining strength. "No one will be able to stop" Made in China "from bringing benefits to the whole world."
Wang at the University of Beijing saw a different conspiracy in the arrest of Huawei. He said it seems to be an effort by the "hawks of China" in the United States to prevent an agreement from being reached.
"The goal of these finalists is to" decouple "the Chinese and American economies," he said. Or at least involve "partial decoupling" in the high-tech area. "
Separately, Japan is destined to become the last country to exclude Huawei and ZTE Corp. from government contracts. The Tokyo government should banish companies at a Monday meeting, according to Japanese newspapers. In August, Trump signed a bill prohibiting US government agencies from using Huawei and ZTE hardware ranging from smartphones to routers and network devices.
Three of the other members of the "Five Eyes" intelligence-sharing network – Britain, Australia and New Zealand – have effectively blocked Huawei from their networks for security reasons. Canada is the only member that has not moved against Huawei, although it may change.
Yang Liu and Lyric Li contributed to this relationship.