Meng Wanzhou, deputy president and CFO of Huawei, was arrested in Canada early this month. Photo: Handout
Meng Wanzhou, deputy president and CFO of Huawei, was arrested in Canada early this month. Photo: Handout

China on Saturday summoned the Canadian ambassador over the “unconscionable and vile” detention of telecom giant Huawei’s chief financial officer in Vancouver, state media reported, in Beijing’s latest angry response to the hot-button case.

Meng Wanzhou has been held since December 1 in Canada on an American extradition request and faces US fraud charges related to sanctions-breaking business dealings with Iran.

The 46-year-old executive was arrested in Vancouver while changing planes, ratcheting up tensions between the US and China just as the countries’ leaders agreed to a truce in their trade war.

In a statement cited by official news agency Xinhua, China’s Vice Foreign Minister Le Yucheng said Meng’s detention was a “severe violation” of her rights and interests as a Chinese citizen.

“Such a move ignores the law and is unreasonable, unconscionable, and vile in nature,” the news agency quoted Le as saying in the statement.

Le summoned Canadian ambassador John McCallum in protest and urged Ottawa to release Meng immediately or face “grave consequences that the Canadian side should be held accountable for,” Xinhua said.

Meng, the daughter of Huawei founder Ren Zhengfei, a former engineer in China’s People’s Liberation Army, is set to remain in custody until at least Monday, when a Canadian court is expected to decide on bail.

In a hearing that was adjourned on Friday, Canadian government lawyer John Gibb-Carsley asked for bail to be denied, saying Meng has been accused of “conspiracy to defraud multiple financial institutions.”

He said if convicted, she faces more than 30 years in prison.

Meng is specifically accused of lying to a US bank, identified by her lawyer as “Hong Kong Bank”, about the use of a covert subsidiary to sell to Iran in breach of sanctions.

Extradition treaty

The extradition process could take months, even years, if appeals are made in the case.

Canada has a long-standing extradition treaty with the United States, requiring it to cooperate with US Department of Justice requests to hand over suspects.

The offence for which extradition is being sought must also be a crime in Canada, and a Canadian court must decide if there is sufficient evidence to support the extradition.

On Thursday, Prime Minister Justin Trudeau defended Canada’s arrest of Meng, saying politics played no part in the decision.

A spokesman for Canadian Foreign Minister Chrystia Freeland told AFP on Saturday that Ottawa had no further comment on the case.

Huawei said on Friday that it would “continue to follow the bail hearing,” expressing “every confidence that the Canadian and US legal systems will reach the right conclusion.”

Meng’s detention in Canada came on the day of a summit between US President Donald Trump and his Chinese counterpart Xi Jinping, at which they agreed to a truce in their tit-for-tat tariff battle.

The world’s top two economies have exchanged steep tariffs on more than $300 billion in total two-way trade, locking them in a conflict that has begun to eat into profits.

On Friday, a Canadian prosecutor told a packed court in Vancouver that Meng defrauded US banks in 2013, and should not be granted bail because of extreme flight risk.

Financial markets

Prosecutors argued in the bail hearing that Meng should be extradited to the United States to face criminal proceedings, The Globe and Mail reported.

According to Gibb-Carsley, the Huawei executive misrepresented her firm’s relationship with a subsidiary, Skycom, which was allegedly conducting business with Iranian firms in violation of US sanctions.

Under an extradition treaty Canada has signed with the US, it is obligated to comply with requests from the US Department of Justice’s Office of International Affairs, if the accused is wanted in connection with offenses that are a crime in both countries.

Meng’s arrest has roiled financial markets and prompted international public outrage and Chinese demands for her release.

At least one top US official, national security adviser John Bolton, has said he was aware of the arrest in advance and caused confusion in a radio interview this week as to the motivation of the arrest.

Speaking with NPR, Bolton was pressed several times to clarify that Meng’s charges were related to the violation of Iran sanctions, and were separate from trade negotiations and the issue of cybersecurity and intellectual property theft.

In response to a specific question about Meng’s arrest, Bolton opined about broader criticisms of Chinese technology firms, playing down the importance of Iran sanctions.

“Well, I think the violations of the Iran sanctions are certainly of major concern to the Trump administration.… But with respect to a number of Chinese companies, we saw what happened with ZTE some months ago and many other issues of concern like that. And I think, as I say, as the negotiations proceed I think we’re gonna see a lot about what Chinese companies have done to steal intellectual property,” Bolton said.

Trade negotiations

ZTE, China’s second-largest telecommunications equipment maker behind Huawei, was facing crippling penalties last spring for violating Iran sanctions. An export ban of US components to the firm was eventually lifted amid a round of bilateral trade negotiations.

Meng’s arrest comes as the US continues efforts to persuade allies not to use Huawei equipment, especially for fifth-generation (5G) wireless networks, which are expected to be rolled out starting next year.

This week, the UK’s largest wireless provider, BT Group, announced that it would remove Huawei components from existing 3G and 4G networks and would not use the firm’s equipment for 5G. Australia and New Zealand have already said that they will not use Huawei for 5G.

As US stocks plunged again on Friday amid confusion regarding the state of talks between Washington and Beijing, top White House economic adviser Larry Kudlow tried to delink the issue of Meng’s arrests from the trade talks.

“I don’t know, by the way, that that necessarily spills over into the trade talks,” Kudlow said of the legal proceedings, adding: “Well look, I think it’s a separate track.

“The bigger picture here is extremely promising,” he said, citing the chemistry between Trump and Xi.

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