A courtroom sketch of Huawei executive Meng Wanzhou speaking with her lawyer David Martin in the courtroom in Vancouver. Sketch Jane Wolsak via AFP
A courtroom sketch of Huawei executive Meng Wanzhou speaking with her lawyer David Martin in the courtroom in Vancouver. Sketch Jane Wolsak via AFP

The stunning arrest of Meng Wanzhou, a figure at the heart of a global race to dominate high-tech industries, has kicked up an international political firestorm with Canada caught in the epicenter.

As her bail hearing continued for a second day on Monday, attorneys for the chief financial officer of Chinese telecoms giant Huawei laid out potential arrangements that would help Meng allay flight risk concerns. The defendant has offered to wear an ankle bracelet and pay for other security services to monitor her whereabouts, according to The Vancouver Sun.

The hearing is set to resume on Tuesday after the judge failed to reach a decision. It could take as long as months or years to resolve the question of Meng’s extradition to the United States, time which the defendant would have to spend in jail if bail is not granted.

Meng was arrested in Vancouver on December 1 and faces charges of fraud in connection with alleged violations of Iran sanctions filed by the US Justice Department, should she be handed over to US custody.

And amid public outrage in China over the detention, insistence from the Trump administration that the arrest was a routine law enforcement action has been met with skepticism.

Leaders in Beijing telegraphed their disbelief that the event was unrelated to broader US-led efforts to stymie Huawei on Sunday through an editorial in the ruling party mouthpiece People’s Daily

The commentary decried the “dark psychology” of those who wish to attack the Chinese telecommunications giant.

“The various illegitimate means used to attack the Chinese firm Huawei have revealed the dark psychology of some shameful people, but it will ultimately be a stone dropped on their own feet. With its every move, Huawei influences the world,” the commentary read.

But as high-stakes trade negotiations with the Trump administration continue, the editorial steered clear of demonizing the United States. The target of its stinging admonition was Canada.

The move by Canadian authorities to apprehend Meng is “unacceptable and of a most vile nature,” the editorial lamented. If Canada fails to release the aggrieved Chinese citizen, it went on, “there would be grave consequences, and Canada would have to take full responsibility.”

That threat was made in person by Chinese foreign vice-minister Le Yucheng over the weekend to the Canadian ambassador in Beijing, though it is not clear what specific consequences Canada might be risking.

While the People’s Daily editorial suggests that ulterior motives may be behind the police action, Beijing has joined the Trump administration in giving signals that the issue will not derail the trade negotiations.

Since Meng’s arrest, China has made a series of announcements related to possible commitments on trade. China’s foreign ministry spokesman expressed further hope on Monday on the prospects of reaching a deal before a 90-day deadline.

Trump administration officials have repeatedly said that the arrest is a law enforcement issue and will be handled separately from the ongoing trade negotiations, while at the same time giving confusing signals.

Top White House advisor Larry Kudlow, speaking to Fox News on Sunday, said that he can’t guarantee Meng’s case would not be used as leverage in trade talks.

“I can’t guarantee anything … This is a [Department of Justice, National Security Council], law enforcement issue,” Kudlow said, adding: “I don’t know how it’s going to turn out.”

“It seems to me that there’s a trade lane … and there’s a law enforcement lane. They’re different, They’re different channels, and I think they will be viewed that way for quite some time,” he said

Those comments were echoed by US Trade Representative Robert Lighthizer, who said in an interview with CBS on Sunday: “This is a criminal justice matter. It is totally separate from anything I work on or anything that trade policy people in the administration work on.”

But Kudlow’s equivocation on the issue of using Meng as a bargaining chip harkens back to an earlier law enforcement case involving a Chinese telecoms giant and Iran sanctions violations.

Last Spring, Huawei’s fellow national champion ZTE was facing a crippling ban on purchases of US-made components in connection with Iran sanctions compliance. Amid reports that the ban was a red line for Beijing in ongoing trade talks at the time, President Trump overruled the original decision, granting leniency to the firm.

Kudlow’s remarks that he “can’t guarantee” Meng won’t be released as part of a trade deal may inspire optimism in Beijing that this is on the table.

Several administration officials said that Trump himself was not aware of the pending arrest at the time of his dinner with Xi, and The Washington Post reported, citing an anonymous source, that he “reacted with intense anger” when he found out.

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