Equity markets fell sharply in Asia after news media reported the arrest in Canada of Huawei’s chief financial officer Meng Wanzhou, pending extradition to the United States on charges of violating US sanctions against Iran.
The news has stunned financial market participants and policy analysts, for two reasons.
First, never before has the United States attempted the extraterritorial rendition of a foreign citizen – Meng is a Chinese national – in connection with sanctions violations. It has imposed travel and banking restrictions, but seeking an arrest warrant for this is entirely without precedent.
Earlier this year, the US government banned exports of US computer chips to the Chinese telecommunications equipment ZTE in retaliation for violations of sanctions against Iran, but sought no arrests.
Second, Meng was arrested on December 1, the day that President Trump and his economic team dined with President Xi Jinping and his advisers at the Group of 20 Summit in Buenos Aires. Trump has every interest in striking a deal with China that would enable him to declare some measure of victory in a trade war, and China has shown every indication that it is willing to make concessions to the United States on intellectual property protection, financial market opening and, at least in rhetoric, on industrial policy, while increasing its imports from the United States.
Who ordered arrest?
The question is: Who ordered the arrest, and why?
It is possible that President Trump knew about it and sanctioned the arrest, to be sure. But it is unlikely that the president would escalate the conflict with China with the arrest of a senior executive of China’s flagship high-tech manufacturer on the same day that he sought to de-escalate the trade war.
If Trump did not initiate the arrest, who did? There are two alternative possibilities.
The first is that the order came from administration officials who believe that the United States must provoke a confrontation with Beijing now, before China becomes too powerful to intimidate. Some parts of the permanent bureaucracy and the intelligence community believe that China’s economy is fragile and that an economic war would produce an economic crisis and political instability, perhaps even toppling Xi Jinping.
That view may seem fanciful, but it is argued seriously, for example by some former senior officials of the Trump administration.
The second possibility is that Trump’s enemies in the permanent bureaucracy simply want to prevent the president from negotiating a deal with China that would enhance his image and remove risks to economic growth.
The Trump administration has been uncharacteristically silent about the matter. Trump and his closest advisers have shown no hesitation to comment about China trade matters.
Beijing demands release
The only public comment from an American politician came from Senator Marco Rubio (R-FL), who earlier this year fought the Trump administration’s efforts to reach a settlement with ZTE. Rubio “celebrated the arrest” in an email to the website Axios.
The US Department of Justice declined to comment. The sanctions regime against Iran is the responsibility of the Treasury’s Office of Terrorism and Financial Intelligence, now directed by Undersecretary of Treasury Sigal Mandelker, a law enforcement veteran who served in the Bush Administration after the 9/11 attacks and advised Homeland Security Secretary Michael Chertoff during the George W. Bush Administration.
The Office of Terrorism and Financial Intelligence is a joint project with the Central Intelligence Agency. Undersecretary Mandelker’s predecessor in the position, attorney David Cohen, subsequently became a deputy director of the CIA. Ms Mandelker’s office initiated the administration’s sanctions against ZTE earlier this year. The Wall Street Journal reported on April 25 that the Justice Department was investigating whether Huawei violated American sanctions against Iran.
For its part, China expressed outrage at the arrest, and its embassy in Canada demanded the release of Meng.
Most of all, China’s government was taken by surprise, and is trying to understand what happened and why.
In any case, the Vancouver arrest raises serious issues. If the White House is behind the action, it casts doubt on the administration’s desire to come to any sort of accommodation with China.
Or, if the arrest was initiated by rogue elements in the administration, it would suggest that Trump is having difficulty controlling his own government.
WM Wong San
That’s according to China interpretation and ignorance of existing international laws. UNCLOS defines maritime borders and entitlements. China is a signatory. Italy should own the whole of Europe, Africa and Mediterranean countries if history applies according China’s arguments. It didn’t participate coz it doesn’t have the solid ground to stand with. Those who agree with China are nations who receive its largesse like Cambodia, Sri Lanka other African countries.
Enb Libra
When did the "permanent court of arbitration at the Hague" became international? Not according to the UN, and not as it advertised itself. It is a privately funded outfit that was paid by the US/Aquino to conduct unilateral "arbitration" on a matter that should ideally be the jurisdiction of the UN International Court of Justice (ICJ). The kangaroo verdict from the Hague is rightfully ignored. Only the US and its gaggle of parrots hype its value. Even the current Philippines president can see the light through this fog.
Enb Libra
When did the "permanent court of arbitration at the Hague" became international? Not according to the UN, and not as it advertised itself. It is a privately funded outfit that was paid by the US/Aquino to conduct unilateral "arbitration" on a matter that should ideally be the jurisdiction of the UN International Court of Justice (ICJ). The kangaroo verdict from the Hague is rightfully ignored. Only the US and its gaggle of parrots hype its value. Even the current Philippines president can see the light through this fog.
Stanley Ti San
India is not a declared official ally of US. But, in times of war, and with Doklam conflict and, with all those Malabar exercises, I’m sure which side India will take. Im sure you’ll be the official moron when this time comes.
Stanley Ti San
India is not a declared official ally of US. But, in times of war, and with Doklam conflict and, with all those Malabar exercises, I’m sure which side India will take. Im sure you’ll be the official moron when this time comes.
Stanley Ti San
Good that you think that way. Why do you think India conducts Malabar military exercises together with US and Japan ? Maybe you’re right, India and US are not allies. Rest my case. LOL
Stanley Ti San
Good that you think that way. Why do you think India conducts Malabar military exercises together with US and Japan ? Maybe you’re right, India and US are not allies. Rest my case. LOL
Yue Fei San
Boycott the English, NZ, Australia, Brazil and NATO countries too.
https://edition.cnn.com/2018/12/05/tech/huawei-5g-bt-technology/index.html
Yue Fei San
Boycott the English, NZ, Australia, Brazil and NATO countries too.
https://edition.cnn.com/2018/12/05/tech/huawei-5g-bt-technology/index.html
Stanley Ti San
Look who’s talking being a bully ? China bullies only small defenseless small nations like Vietnam, Phils, Korea, don’t respect international law like UNCLOS and SCS Hague ruling. With Japan, China is trying but too afraid as it’s more than a match. The persecutions and human rights violations of Falun Gongs, Uighurs, Tibetans. It’s all a blowback to China. It should be classified as an outlaw country.
US is the defender of the free world and China is not.
Stanley Ti San
Look who’s talking being a bully ? China bullies only small defenseless small nations like Vietnam, Phils, Korea, don’t respect international law like UNCLOS and SCS Hague ruling. With Japan, China is trying but too afraid as it’s more than a match. The persecutions and human rights violations of Falun Gongs, Uighurs, Tibetans. It’s all a blowback to China. It should be classified as an outlaw country.
US is the defender of the free world and China is not.
Enb Libra India has never been an ally of any western country, you moron.
Enb Libra India has never been an ally of any western country, you moron.
Winston Medved why do caucasians still have hairy chest and back and long hooked monkey like noses? Answer: Simple. These race of white trash is far behind in the evolution cycle, still cannot grow out of the ape ancestors. That explain their need for musculiarity, to hunt, like what all animals have to do.
Winston Medved why do caucasians still have hairy chest and back and long hooked monkey like noses? Answer: Simple. These race of white trash is far behind in the evolution cycle, still cannot grow out of the ape ancestors. That explain their need for musculiarity, to hunt, like what all animals have to do.
Howard Xue Very well said. These pentagon officials and politicians are clearly interfering into the national security of China.
Howard Xue Very well said. These pentagon officials and politicians are clearly interfering into the national security of China.
One trouble maker british journalist was merely barred from entering HK and the dispicable gweilos make it into a big commotion. At least, Carrie Lam has the civility not to throw that white bastard into jail.
One trouble maker british journalist was merely barred from entering HK and the dispicable gweilos make it into a big commotion. At least, Carrie Lam has the civility not to throw that white bastard into jail.
Enb Libra You certainly speak like the typical american thuggish bully that you are. The world is beginning to hate deep to the core, the white barbarians, particularly the despicable english speaking anglo saxons.