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 in December last year. Photo: Handout

The arrest of Huawei chief financial officer Meng Wanzhou by the Canadian authorities at the request of the US was unprecedented. Meng was arrested at Vancouver International Airport on December 1 while on a layover en route to Mexico.

It is safe to say that no country other than the United States has such a long reach that it can get away with such a blatant breach of international protocol. From now on, anyone can be arrested anywhere in the world on orders from the US.

What are the possible reasons and explanations for this highly unusual arrest?

First of all, whose idea was this to begin with? Was it US President Donald Trump exercising his formidable talent to extract a better trade deal from China by arresting Meng? He did say that if he could get a better deal with China, he would let her go.

On the other hand, Trump did not seem to know that the arrest was in the works and was as surprised as the Chinese. Given the chaotic disarray plaguing the White House, for Trump to be in the dark would not be surprising. Perhaps the idea originated with national security adviser John Bolton.

Is this a Bolton ploy?

Bolton has always been an “America über alles” kind of a guy. When he was US ambassador to the United Nations, he made it eminently clear that he represented an America whose laws trumped the UN’s and not the reverse. To his way of thinking, the UN exists to serve American interests, not the other way around.

If he thought arresting Meng would slow Huawei down and give the US a strategic edge, he would do it, and the hell with the niceties of international law and order. He is fully capable of creating his own brand of global terrorism.

So what is the Trump/Bolton beef with Huawei? Supposedly, the accusation leveled against Meng was violating the sanctions against Iran by continuing to do business with that country.

However, during the administration of Barack Obama, the US, the UK, Russia, France and China along with Germany and the European Union struck a deal with Iran to roll back its nuclear program. Last January, Trump decided unilaterally to withdraw from the deal and reimpose sanctions on Iran, even as the other signatories to the deal continue to work with Tehran in an attempt to keep the agreement in place.

Therefore, even if Huawei does indeed continue to do business with Iran as a Chinese company, is it obliged to abide by the US sanctions, sanctions it is not party to?

Even if the US objects to Huawei’s business activities with Iran, does the US extraterritorial prerogative extend to arbitrary detention of senior executives of Huawei at the will of the White House?

Meng is the CFO and vice-chairwoman of Huawei and the daughter of Ren Zhengfei, founder and chairman of the company. In general, CFOs do not get involved with day-to-day business transactions. Is her arrest designed to put pressure on Chairman Ren?

Among the innuendos directed at the company, Huawei has also been accused of stealing US intellectual property. The basis of this accusation goes back to Huawei’s early days when US-based tech conglomerate Cisco Systems accused Huawei of infringements.

The disputes were settled out of the courts and Huawei has never been convicted of any intellectual-property theft.

Huawei has flourished despite US interference

Years later, Huawei offered to acquire what amounted to a garage sale of the remnants of a formerly high-flying networking company called 3Com. The US government turned down its bid.

The government would rather let the last remains of 3Com go down the drain than for Huawei to gain any potentially useful IP, and that was how 3Com disappeared.

In effect Huawei has been barred from participating in the US market to any significant extent. In recent years, the US government has been actively persuading allied countries that Huawei telecommunications equipment cannot be trusted because it could install back doors to facilitate cyber spying for China.

Then along comes a piece from IT Wire, an online publication based in Australia. This piece asked the rhetorical question: Where is the evidence that Huawei equipment is used for spying by Beijing? The answer seems to be: There is none.

Don’t do as Cisco does

The Australian piece goes on to observe: “For all the talk of spying by Huawei, one has yet to see any evidence of such activity. There have, however, been back doors disclosed in equipment from global networking vendor Cisco, one which the company buried therein. Yet there has never been any talk of banning Cisco equipment from the Internet.

“There has also been a verified account of the American NSA spy agency planting back doors in Cisco equipment when it was en route to certain customers.”

Looks like the Americans’ attribution of Huawei’s capacity for mischief is based on the knowledge of their own well-established practice with Cisco.

Despite Huawei being banned by the US government from the US market and under the US pressure on its allied countries not to buy from Huawei, the 30-year-old company has grown to become the world’s largest telecom-equipment firm.

This year’s sales are expected to exceed US$100 billion, commanding 28% of the world’s tech market, and Huawei is also the second-largest maker of mobile phones, next only to Samsung.

Someone like Republican US Senator Marco Rubio may well find Huawei bewildering. How can a mere Chinese company copy and steal its way to greatness, he may wonder.

The real answer is that throughout its existence, Huawei has invested heavily in research and development so as to offer its customers superior performance at a lower price than its rivals.

Weary of reputation assassination from the US, Huawei has recently and openly challenged anyone to present evidence of security leaks from Huawei equipment.

At present Huawei is racing to introduce its fifth-generation technologies for mobile phones around the world, many steps ahead of the telecom companies in the West. This is most likely the real reason behind the US efforts to suppress Huawei’s advances.

Winning the 5G race will be important to many applications based on mobile computing and artificial intelligence and the orders-of-magnitude increase in Internet speed will accelerate the introduction and proliferation of self-driving autos.

By treating Huawei as a pariah not allowed in the US and its allies, the American policy will divide the world into two parts.

In addition to China, most EU countries along with many others in the world find the value proposition from Huawei irresistible.

Others will continue to abide by America’s lead and pay more for their phones and get slower connections but be able to sleep nights knowing that only Uncle Sam’s operatives can or will spy on them.

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