Huawei CFO, Daughter of Founder and Possible Heir Apparent, Arrested in Canada on a US Extradition Request on Charges of Transfer of US Technology to Iran

The arrest of of Huawei CFO Wanzhou Meng on December 1 in Vancouver on a US extradition request is a major geopolitical and news event. Reuters reports Meng was intercepted while changing flights.

So much for Xi and Trump trying to a reset so as to prevent the imposition of US tariffs on Chinese goods. Mr. Market is not happy at all. S&P futures are down 1.4% as of this writing. As an aside, it’s odd that word of the arrest has gotten out only now. It took place the last day of the G20 summit. Was actual or US anticipated wrangling over the arrest one of the reasons for the apparent confusion over what Xi and Trump had agreed?

Meng has a bail hearing set for Friday.

We are in the “nobody knows much” phase of this story, and are likely to remain there for a while, although the Chinese government is having hissy fits over the arrest.

The US has been investigating Huawei since 2016 over suspected transfers of US technology to Iran in violation of US sanctions. Bloomberg reports that the Department of Justice launched a new probe in April on whether Huawei had been selling equipment to Iran in violation of US sanctions.

The fact that Canada, which is not on the best of terms with the Trump Administration and where there is no political upside to playing ball, arrested Meng and extradited her suggests that there is some meat to the allegations.

As readers likely know well, the US has been trying to restrict Huawei sales in the US and Western countries, particularly of its smartphones and routers alleging that they have backdoors that allow for data to be passed to the Chinese government. While entirely plausible, this also smacks of the pot calling the kettle black. From the Financial Times:

US telecoms networks are banned from using Huawei equipment. Australia and New Zealand — members of the Five Eyes intelligence sharing network with the US, UK and Canada — have blocked Huawei and other Chinese suppliers on security grounds..

Huawei said Ms Meng — also known as Sabrina Meng — was detained by Canadian authorities on behalf of the US, which sought her extradition over “unspecified charges” in the Eastern District of New York.

The arrest took place shortly on the heels of intelligence service noisemaking about Huawei. Again from the Financial Times:

Western security chiefs have been unusually vocal in recent days to highlight concerns over Chinese technology groups. David Vigneault, head of the Canadian Security Intelligence Service, warned that his agency had seen a “trend of state-sponsored espionage” targeting Canada’s advanced technology, including 5G networks. 

His remarks came a day after Alex Younger, head of MI6, the British intelligence service, said the UK faced a tough decision over whether to allow Huawei to supply technology for its 5G network.

The Wall Street Journal has a tidbit from a single source, so take this with a fistful of salt:

In 2007, Ms. Meng served as a board secretary for a Huawei holding company that owned Skycom Tech, a Hong Kong-based firm with business in Iran and employees who said they worked for “Huawei-Skycom,” according to a person familiar with the matter. She became a director at Skycom Tech in February 2008, Hong Kong corporate records show, before resigning in April of the following year.

That role is now the under scrutiny by American authorities.

While this may be part of the basis for charging her, Meng is the Huawei deputy chairman as well as its CFO, and therefore could be depicted for purposes of prosecution as being broadly knowledgeable about and involved in the company’s affairs.

From China, the arrest looks like a US effort to hamstring a national champion. From Bloomberg:

Huawei’s ambitions now range from artificial intelligence and chipmaking to fifth-generation wireless. That last effort, a massive push into the future of mobile and internet communications, has raised hackles in the U.S. and become a focal point for American attempts to contain China’s ascendancy…

In targeting Huawei, the U.S. is threatening one of the companies at the heart of Xi’s long-term campaign to wrest the lead in future technologies and wean China off a reliance on foreign technology.

Once a purveyor of unremarkable telecommunications equipment, Huawei’s now No. 2 in smartphone shipments and is shooting for the lead in fifth-generation wireless networks while preparing to take on some of America’s biggest chipmakers. It’s already by some reckonings the world’s largest provider of networking equipment to wireless carriers, outstripping the likes of Ericsson AB with growing sales in Europe. It’s declared its intention to surpass Samsung Electronics Co. in phones as well. The company is targeting record sales of $102.2 billion this year…

It’s unclear whether Meng’s arrest could trigger the same sort of sanctions that ZTE incurred. Such a move would be far more significant given Huawei’s heft.

In August, Trump signed a bill banning the government’s use of Huawei technology based on the security concerns and U.S. allies are either imposing or considering bans…

“This is what you call playing hard ball,” said Michael Every, head of Asia financial markets research at Rabobank in Hong Kong. “China is already asking for her release, as can be expected, but if the charges are serious, don’t expect the US to blink.”

Reuters provides some reactions:

Jia Wenshan, a professor at Chapman University in California, said the arrest was part of a broader geo-political strategy from the Trump administration to counter China and it “runs a huge risk of derailing the U.S.-China trade talks”.

Mei Xinyu, a researcher at a think tank run by the Ministry of Commerce, wrote in an article on the official People’s Daily Overseas Edition’s WeChat account that the arrest was a warning that the Trump administration might abandon its deal with China….

While Meng’s arrest comes at a delicate time in U.S.-China relations, it was not clear if the timing was coincidental.

Needless to say, this is an developing situation. Huawei will presumably present some additional information after the Friday hearing even if it is closed to the public.

Print Friendly, PDF & Email

77 comments

  1. Thuto

    Long known for its warship and barrel of a gun diplomacy, the US is now adding prison cell diplomacy to its repertoire, wow. The world is indeed a lovely place for western MNC, what with competition for pre-eminence in an emerging technology snuffed out in key markets before the bout even begins, before the (free)market can “freely and fairly” allocate market share gains to whoever brings the best products to market. The whole thing smacks of desperation, to say nothing of hypocrisy.

    Reply
    1. Olga

      “Jia Wenshan, a professor at Chapman University in California, said the arrest was part of a broader geo-political strategy from the Trump administration to counter China and it ‘runs a huge risk of derailing the U.S.-China trade talks.'”
      Yes, I think we call it hybrid war. particularly, in light of the attempted destruction of Chinese ZTE and demands that no US allies use the Huawei equipment.
      China is clearly a threat – mainly economic, followed by all else. The US will use all power it has at its disposal to stem its rise (or, at least slow it down to a crawl). The bad news is that China will not be deterred, although it may change some of its tactics (maybe, maybe). Bad news because what is next? A war?
      “The fact that Canada, which is not on the best of terms with the Trump Administration and where there is no political upside to playing ball, arrested Meng and extradited her suggests that there is some meat to the allegations.”
      My assumptions would be different – in spite of some outward animosity to Trump, this just proves that the intelligence services of the two countries are more than happy to cooperate.

      Reply
    2. F.Korning

      Except it’s Canada, from a liberal government, traditionally loathe to kneel to the US and equally eager to kowtow to megacorporations

      Reply
  2. none

    This sounds something like the CEO of Qwest who got sent to prison some years back after not putting backdoors into the Qwest network to help the US govt spy on everyone. Maybe Trump wanted Huawei to do the same thing.

    Reply
    1. WobblyTelomeres

      Nacho Joe was playing fast and loose in his quest to expand. Particularly, the USWest merger. Not an NSA fan, but blaming them for his fall is disingenuous.

      Reply
    2. Jeff N

      back in the 90s, I remember sneaking into the Qwest building in downtown Denver to make use of their delicious cafeteria

      Reply
  3. The Rev Kev

    Have long suspected that the US government consists of small, powerful fiefdoms that are often at war with each other as much as other countries. People may remember when Putin and Obama agreed on a ceasefire in Syria – only to have the Pentagon blow up the agreement by attacking a Syrian Army position in order to try to help Jihadists capture the besieged city of Deir ez-Zor.

    Having Wanzhou Meng arrested on the last day of the G-20 summit may just have been another of these fiefdoms trying to blow up any chance of a Trump-Xi agreement being formulated over the coming months. Can anybody imagine what would happen if the working daughter of Apple or Microsoft’s founder was arrested in Hong Kong with a threat to transfer her to mainland China on hokey charges? People would go ballistic!

    It would not have escaped Chinese notice of the treatment of Russian national Maria Butina who has been kept in solitary confinement for 22 hours a day since July and being denied dental treatment. She is reportedly suffering claustrophobia attacks due to her treatment. This form of soft torture may be meant to break Butina in order to accept any deal offered by the Justice Department so the Chinese may fear that the same will happen to Wanzhou Meng. They would not expect the American justice system not to try games like this and already the US has an established reputation of having targeted nationals arrested in third-party countries in order to be transferred to the US prison system for their form of rough justice. And why would some people want to crash any chance of a Chinese-US agreement on trade and technology?

    Some people just want to watch the world burn.

    Reply
    1. Yves Smith Post author

      While I agree this could have been timed to undermine Trump, the case appears to have been well underway. It’s is the hands of the Eastern District of New York. This could have been the first opportunity the US had to ask an ally to arrest a targeted Huawei executive. The DoJ could have a sealed indictment. So I would not make assumptions.

      Reply
      1. worldblee

        These cases do not happen in a vacuum; they happen because elements of the state want them to happen to make a point. The timing is suspicious and given that name of the DoJ is oxymoron I think Rev Kev’s points are well taken.

        Reply
        1. Yves Smith Post author

          As I said, they’ve been working on this case in general since 2016 and apparently pursued a new angle as of April. They seized her in transit. That was opportunistic and could not be precisely timed.

          Reply
  4. Alex V

    My gut feeling is that this is ultimately motivated by commercial interests, not national security. Huawei has quickly become the largest supplier of telecom equipment, and established players are feeling extremely threatened.

    Part of the reason for their rapid pace in innovation is that they’re not afraid to hire Western talent. I work a few hundred meters from a Huawei office – it’s filled with former Ericsson engineers, many laid off because Ericsson was for a long time more focused on financial innovation and rent extraction than R&D. Their designs are then produced in Asia, so they can build products with excellent tech at low cost, often in their own factories.

    I also wouldn’t be surprised if they hire local marketing and advertising firms – compared to many Chinese companies, the copy-writing and design of their website and other materials is far better, probably because it’s produced by native speakers in each country. On the other hand, I often see English versions of websites for European companies with poor grammar and typos, due to arrogance on the part of the “educated” staff.

    My interpretation is that Huawei is far more methodical and patient than some of their competition when it comes to long term success of the business, not the share price.

    In any case, it will be interesting to see what the actual charges are. Export control law is painfully convoluted and presents many paths for opportunistic prosecution.

    Reply
    1. Bugs Bunny

      This is an excellent comment. They have global ambitions and give autonomy to their local subs much in the way that IBM did back in the day. This scares the bejeezus out of Western companies like Nokia, Amazon, MSFT, etc.

      Reply
    2. Thuto

      True, i’ve seen marketing collaterals of some top tier European companies expanding into Africa, and even to a non-native English speaking person like myself, it was clear just looking at them they were assigned for quick translation to someone/people without the requisite linguistic skills to elegantly distill the marketing message and transmit it. And to your point, I recently had a look at the local Huawei South Africa website as part of research I was doing for a project and I remember being struck by how well put together it was compared to the Europeans mentioned above.

      As regards the arrest itself, it’s only ostensibly about national security as you point out. This has snuffing out competition written all over it.

      Reply
    3. NotReallyHere

      Good comment and while I agree I would point out that Huawei suffers from original sin syndrome. Founded by member of China’s armed forces, It’s business model until the mid noughties was to buy Cisco routers, reverse engineer them and sell at a massively lower price with financing arrangements that no western operator could match (prices at one third the level of Cisco and finance deals that included three+ years of grace on repayment).

      They are the most successful and obvious of the Chinese IP stealers out there.

      Reply
        1. Anonymous Coward

          I’ve read reports that they copied the firmware, bugs and all.

          Having worked for a competitor of Huawei (though not Cisco), I would assert this is unambiguously true.

          Reply
        2. NotReallyHere

          Yep. In a memorable conversation with a US based Chinese physicist I learned that China’s big problem until recently was the knock on effects of the Cultural revolution when (the lucky ones) of the educated classes were banished to a variety of the most rural and isolated parts of the country. The country destroyed its own knowledge base and spent the 1980’s till now trying to re- create it. Shortcuts allowed in the rush.

          Reply
        3. Alex V

          One other thing to note is that many telecom patents are quite frivolous and are used strictly as licensing cudgels, not as a way to protect any type of in house developed innovation. Not that it makes it legal, but I’m guessing part of the thinking on Huawei’s part is “why should we waste all this time rewriting code just to get around the obvious and commonly known way of doing things?”.

          Reply
      1. Alex V

        Agree that their IP flattery practices are less than appreciated by the legacy players. Would however argue that Cisco and peers had also used to taking their customers for granted, were lazy regarding innovation since they had patented everything and that they completely neglected or abused developing markets. Huawei on the other hand saw an opportunity in those countries and has a different perspective since China was (and in some ways still is) developing as well.

        Reply
        1. NotReallHere

          I suppose there is an element of truth in that. I would counter that the complex nature of tech is difficult because innovation is “easy” when you have nothing but gets hard very very fast because the new can’t disrupt the existing.

          As the existing gets bigger the possibility of catastrophic disruption grows exponentially. They all become hide bound very fast

          Reply
  5. makedoanmend

    Gotta admire USA efficiency. Who knew that the escalation of conflict with Iran (i.e. new and improved sanctions) could be used to extend conflict to China. It’s a twofer or maybe a multifer.

    Whether an intentional twofer or not, it’s certainly intriguing.

    It’d be interesting to know who’s who in the ‘Top 10 Most Wanted List’ globally. Assange gotta be up there, but are any country’s actual leaders on the list?

    Also I can’t imagine any supranational legal body that China can appeal to in this case given the narrow scope of the charges and from whence the indictment originates. I suppose we’re back to naked gun boat diplomacy. Legal rights are determined by the strongest.

    Many Russians and indeed other nationals are taking notes. As the USA global reach widens, the options for many others narrows.

    It just may be that President Trump’s agenda of consolidating power, political and economic, is more far-reaching and possibly coherent than many imagine. He leads and others, recognising the commonality of the agenda, follow. There may be different factions competing within the USA power structure (including countries and factions within countries intimately allied to the USA) but that does not mean that convergence in tactics may not occur when it is in their common interest. After all, whilst there may be competing factions of power, their combined aim is to concentrate power within their overall sphere of influence and then extend that sphere.

    Also, people and organisations that may see advantages in changes being made in policy that cause events to unfold in ways not normally anticipated may want to jump on the bandwagon to see what swag is left for them to mop up should the overall agenda succeed. The Canadian leadership in this particular instance may have been so swayed.

    Probably over analysing the situation but the political impact, whether intentional or not, is going to have consequences.

    They may de-escalate the situation but some more damage to relations has already been done.

    Capitalist politics is fascinating stuff, and this episode shows that Capitalism is so often much more than mere business and the making of money. From the walled trading towns of medieval Italy, where letters of credit and gold back currency gained prominence, to the global politics of today the pursuit of capital and the power it confers has affected the entire globe in some manner.

    Reply
    1. Yves Smith Post author

      I can’t see that there is a supranational appeal. The US has an extradition treaty with Canada. Meng will have a hearing where she will get to contest the extradition. She won’t be denied due process but one wonders what her conditions of detention would be in the US. The DoJ ought to be smart and isolate her in a plush setting (as in the uncertainty and confinement alone will wear on her, a gaol is overkill), but those prosecutor types like to play rough when they can.

      Reply
    2. rd

      I think Canada will have been swayed by the evidence. Canada is typically focused on rule-of-law and fairness. Canada does a lot of business with China and will generally use things like the TPP to dilute Chinese influence instead of direct confrontation.

      I think the US prosecutors will have had to show some hard evidence to the Canadians to get them to make this high-profile arrest and consider extradition proceedings. I think Trump has proven to be too mercurial and unreliable for them to think a move like this would be reliably effective in currying favor, so would not be worth the risk with the Chinese unless there was a solid reason..

      Reply
      1. campbeln

        Colin Powell presented “hard evidence”, too. Not to to mention any of a myriad of other instances of the same kind of “evidence” paraded about by America as “proof” of this or that…

        How can anyone trust anything America says anymore?

        Reply
        1. rd

          Canada didn’t go into Iraq because they didn’t believe the “hard evidence” presented by the US was sufficient to warrant participation.

          But Canada did go into Afghanistan as part of NATO and had the highest casualty rate of in-country forces of any country, including the US. The evidence was clear that al Qaeda was behind 9/11 and they had planned it from Afghanistan.

          Reply
          1. human

            The evidence was clear that the CIA was behind the bombing (take your pick) and they had planned it from Washington, DC.

            Fixed it for ya.

            Citations, please. And what about those “cells” in Germany and Florida?

            Reply
          2. wilroncanada

            You’ve got to be kidding.
            Canada did not ‘directly’ participate in the Iraq holocaust because its political leadership had been conned into Afghanistan and regretted that, while they would not likely admit it. Fool me once, shame on you; fool me twice, shame on me.
            I put ‘directly’ in minor quote because in fact Canada was involved, through inter-military co-operation arrangements, including at one point, a Canadian general acting as commander-in-chief. Ah, the plausible denial game.

            Reply
            1. F. Korning

              Nevermind Al-quaeda; Afghanistan was a failed state with the Taliban running amok imposing brutal rule and despoiling the country. On a humanitarian angle alone Canada could justify intervention.

              Iraq, on the other hand, was a nationalist Baathist secular republic, which despite the even more draconian regime and heavy handedness, supported a thriving culture and educated populace. The difference in the two is rule of law versus chaos. Anyways, Iraq was Stable under Pax Saddama. Really the best one could hope for in the middle-east. Not a failed state by any means.

              The other vibrant baathist regime, Syria, is being deconstructed. One has to wonder if the secondary objective, after oil and gas, is not to deny pan-arab nationalist republics who would justly defend their mineral rights.

              Reply
  6. southern appalachian

    Weren’t there a few cases in Syria, perhaps, where Iran got a hold of some US drones? Trying to remember, but seems to me there was either a few instances or else growing concern of drones being hacked.

    US force multipliers are technology based. National security and globalization are going to mash up at some point, just no way around it.

    Reply
    1. Yves Smith Post author

      That is a huge smoking gun. Should have included it in the post. With that, the US will be almost certainly have enough to get a grand jury to indict her, if they don’t already have a sealed indictment. This is an admission of intent and conduct.

      From comments at the FT. Take with a grain of salt:

      ponkles
      @Cassandra Just check the outrage in China. None. Why?  China does detains foreign national all the time, particularly Australian Chinese who they want to see on corruption charges.   

      They may be involved in a company in China that has a patent that China wants, mainly to share with the princelings companies or in the Provinces.   Their families may be at risk if they do not ‘help out.’

      This was the case with stand out solar panels designed in Australia by Professor Martin Greene of University of New South Wales.  He has a bright Ph.D student from Mainland China.  One day men in suits from China got off the plane to see the young Chinese scientist. He went home with them, and of course gave them the patents for Greene’s solar cells.   They set him up in a company making the cells and he was successful.  Too successful as jealous eyes wanted shares of that industry sector.  That happened, his work and secrets shared out to competing start up solar companies, he complained and ended up in goal for years.  

      Just last week another Australian businessman was finally released from goal in China.  He has been there on trumped up charges.    Source:  South China Morning Post. 

      This commentor points out that their is a PITA route to get around the sanctions, but Meng’s remarks are an admission that Huawei couldn’t be bothered at least some of the time:

      lordwelsh
      Embargo to Iran inter alia EAR734, is pursuant to US technlogy.  If a company out engineers US technology, then they are free of said embargo laws.  I should know as I have exported US SW to Iran with full approval of BIS and The Pentago as the solution was in line with the US Embargo “De-minmis” rule.  The sad thing is, most export people do not understand hte laws.. 

      Reply
      1. vlade

        From my Aussie friends, I know that Aussies are starting to take Chinese threat to their IP much more seriously.

        For example, he told me that a some of companies that develop proprietary models don’t let any ethnic Chinese employees see the whole codebase (after experiencing Chinese employees uploading it on a memory stick and disappearing to China), and try to not hold on any of them for more than about 12-18 months.

        Fun. I find it especally funny as Samuel Slater was called a father of US Industrial revolution.

        Reply
        1. The Rev Kev

          It’s all part of an old historical cycle. The US played fast and loose with copyright in the 19th such as when British books were copied and published in the US in spite of complaints by British publishers. Go back earlier and you find the British hiring Continentals with looming experience for example to teach the British the Continent’s secrets back in the 18th century. The Chinese are simply following an old pattern of knowledge theft.

          Reply
          1. Noneofmany

            Sorry but there is no comparison.

            Most countries have violated trade norms when their first industrializing and need to make exceptions to get industries that make basic goods and services for it’s own consumption and not have to totally relay on a foreign power for basic necessities.

            China was purposely allowed to get away with this until very recently because of their “poor man” status in the world, and recognition that some of the same happened when other modern powers were developing.

            Likewise, global trade in the 1800’s was nothing like what it is today. In the 1700 and 1800’s global trade was mostly in raw commodities while finished manufacturing goods weren’t really protected by a universally accepted norm in intellectual property except for books.

            Today being a commodities exporter is considered to be on low end of economic development compared to manufactured goods.

            China’s model of neomercintalism is completely different both in scale and kind than anything before it.

            The idea of using government and citizen spies to raid every IP it can get it’s hand on so it can produce those goods at a highly subsidized rate, specifically to drive it’s competitors out of business even at the cost of it’s own internal quality of life is new.

            Reply
            1. The Rev Kev

              The scope and extent is different but the principal is the same. Developing countries always try to give themselves and edge – including industrial spying – until they do not need it any more. Then those very same countries become paragons of copyright and the like. Twenty, thirty years from now expect China to be an aggressive enforcer of copyright laws. For a bit of perspective, check out the following links-

              https://www.allaboutlean.com/industrial-espionage-and-revolution/

              http://www.newworldencyclopedia.org/entry/Industrial_espionage#Industrial_Espionage_in_History

              Some of the stuff that the British did in the 17th and 18th centuries should have movies made about them. Even earlier – “two Christian monks smuggled silkworms out of China in bamboo canes. Those silkworms were used to give the Byzantine Empire a trade monopoly in Europe, which became the foundation of their economy for the next 650 years.”
              Marvelous stuff too such as the Great British Tea Heist-

              https://www.smithsonianmag.com/history/the-great-british-tea-heist-9866709/

              Reply
                1. The Rev Kev

                  Which were closely guarded with the penalty of death if someone tried to export it. The secret of fine porcelain-making swiped by Britain was certainly a case of stolen IP as was looming technolgy.

                  Reply
          2. Craig H.

            Didn’t the Lombards steal silkworms from the Chinese? Or maybe it was the Alsatians? It was in one of those Middle Ages history books and it might have been bogus.

            Intellectual property is not like a bicycle.

            Reply
        2. Colonel Smithers

          Thank you, Vlade.

          I have heard of similar on French, German and Swiss TV this year.

          Also, I have heard of Chinese students on UK university R&D projects absconding with materials. A fair amount of UK university research is funded by China. The quid pro quo is that manufacturing and eventually design etc. take place in China.

          A decade ago, a Swiss headhunter explained how Geberit lost so much that it decided to on shore production.

          With regard to Slater, as Germany industrialised in the 19th century, it was accused by Britain of IP theft.

          Reply
        3. TimH

          Samsung and LG haven’t allowed memory sticks inside their development departments for years. Commercial visitors, from personal experience, have laptops marked and stuff searched to avoid this sort of leakage.

          Reply
      2. Alex V

        The question is though what exactly was exported. As another commenter mentions there are de minimis exemptions below certain content percentages for US technology by value. That could get quite technical in the courts, since cost and price are both open to adjustment on a supplier and customer basis. The other possibility is of course that the violation occurred due to some sort of US dollar transactions. I would also say the quotes in the SCMP piece are general enough that it doesn’t really establish which laws and jurisdictions they considered red and which yellow. But what that means in regard to establishing intent will of course depend on the aggressiveness of the prosecution and the mood of the judge and or jury.

        Reply
  7. human

    Some 2 years ago, JPMorgan/Chase and Wells Fargo began installing Huawei ATM machines at all new banking locations and replaced Wincor-Nixdorf equipment with Huawei ATMs at all existing locations.

    Just sayin’

    Reply
  8. divadab

    “The fact that Canada, which is not on the best of terms with the Trump Administration and where there is no political upside to playing ball.”

    Canadian police follow the law. If presented with an arrest warrant in accord with the US-Canada extradition treaty, they will execute it. No political considerations.

    Note that Ms. Meng is the daughter of the founder of Huawei. Right up there in rank and status. If this were ancient Rome, the ransom would be very high.

    Reply
    1. Yves Smith Post author

      That is the implication. The US could not pull strings. This is being done by the book according to the extradition treaty. Meng is still in Canada. In theory she could beat the extradition request at her hearing, but per the link from Lambert from the SCMP story, what is in that alone looks like more than enough to extradite her.

      Reply
    2. The Rev Kev

      Hmm. I can see this getting problematical here. Do US corporations play loose with the laws in China? Are any of them located in a now China-friendly Hong Kong where they could be extradited to the mainland? What if local bribes were an accepted custom but if the Chinese wanted to, they could arrest some US executive with proof of corruption by trying to bribe an official?
      If I was Chinese, I would point out the number of banks like HSBC, Bank of America, Rabobank, etc. that were convicted of laundering drug money from the Drug Cartels but how nobody went to jail. Whether Meng is innocent guilty is at the moment irrelevant as I seriously, seriously doubt that this is a matter of “justice”. What this resembles to me most is the kidnapping of a mafia princess which is never a good idea.

      Reply
      1. James

        At some point China will decide to give the US a taste of their own medicine. Perhaps arrest a US businessman and extradite him to Russia. The US has gotten used to passing and enforcing supranational laws, but they are not the only country that can play that game.

        Reply
      2. F.Korning

        HSBC was founded on the principle of drug money, gun running, and money laundering. It’s been doing it since the British East India Company and the Opium wars. The retail arm is just a veneer to mask its true activity. Why stop now?

        Reply
  9. Carolinian

    Can we cut to the chase and say that the US telling the rest of the world what to do re Iran or North Korea or Cuba is itself an abuse of power and not to be respected? There’s a great deal of hypocrisy when a country that refuses to respect established international law then turns around and nominates itself the world’s cop and acts sanctimonious when others refuse to comply.

    Reply
    1. JTMcPhee

      No, no, no, no!! We mopes are supposed to just “look at the specific case under our US laws against her/her employer,” make noises about how this is a textbook example of application of “rule of law,” complete with “due process” in the rendering nation. And no one, no True American, colors outside the lines to point out the vast hypocrisy and overreach of “our” imperial overlords/supranational corporate “interests.” “She/it violated OUR law against doing business with people in a nation that we in our arrogance have effectively declared war upon, previously overthrown the government of on behalf of our commercial interests, and deceitfully gone about ginning up the elements of a ‘Wag the Dog’ casus belli against. Oh, and after all we are going after the Yellow Perils that have dared to copy our playbook of stealing technology, using IP ‘law’ to stifle competition and lock out better (sic) technologies and ideas, in reaching for their own version of hegemony.”

      No, must stick with the narrative, engage whole-heartedly in the two-minute hates, and “report all violations to the authorities for punishment.” Because ‘it looks like a prima facile case has been made out for violation of “our” so arftully and democratically written Overarching Extraterritorial Effect Laws, which after all are the foundation of the world order.’

      Wasn’t this one of the clubs used to try to beat Japan, Inc. not so very long ago? Like when, in the mass idiocy of the Cold War, the Toshiba Machine Company sold advanced numerically controlled metal machining equipment to the Soviets, letting them jump ahead in milling the airfoil profiles for much quieter propellers for their missile and attack submarines, thus making obsolete many billions of dollars worth of passive listening tech placed in the oceans by “our” MIC that suddenly could not hear and locate the Soviet subs, thus altering the “balance of terror” against the Empire. But now the Japanese are “friends and alllies.” And besides, Toshiba made great laptops, so there!

      Interesting that the Southern District US Attorney does not seem to have much interest in political corruption or the thievery (as laid out here at NC so very well) by “our Banksters,” or go after “US” MIC corporations that do all kinds of massive fraud, and foster technology transfer to “potential enemies” or let e.g. the Israel ites deep into “our” state secrets, and access to “our” really cool technologies which they then sell on to others.

      Does not matter, from all I read, including here at NC. Looking increasingly clear that selfish self-interest and shortsightedness and self-pleasing behaviors have baked in an end to our execrable species. Now it’s just a matter of documenting the “outrages,” and then the “outages,” that mark the post-Jackpot negative inflection of the curve of habitability and population.

      And the Few will live out their despicable (to most of us mopes, though not the ones among us who want in on the scam) lives, all pleasure centers fully titillated, to finally die in comfort and with the best of care (or live on thanks to Tech) with the sneering “Apres nous le deluge” on their lips.

      Reply
  10. Raulb

    This is a mockery of globalization, free markets and rule of law. It seems these apply only when in the benefit of a few. This is like China or Russia getting some Trump or Bill Gates daughter arrested for doing business with Saudi Arabia in a third country. Who will support that?

    Unilateral sanctions against Iran or Cuba without the consensus of the UN is questionable in law in the first place. What crimes have Iran or Cuba committed to the world or the US? And yet these sanctions by countries who count Saudi Arabia as their closest ally are allowed to cause suffering to millions of people for decades on end and no one cares. But this does not stop vocal affectation of ‘values’ and ‘ideals’. This is the twisted state of our world.

    It seems ultimately foolish to believe in ‘ideals’ when they apply only when in their political and economic benefit of a few, and when not will use propaganda and their collective political, diplomatic and military power to harass others. How many American executives are arrested for doing business with SA?

    Reply
    1. Noneofmany

      China unilaterally sanctioned South Korea when they exercised their right to host American interceptors on their soil.

      Remember all the hubbub about stoping tourists from spending money there and cutting imports in various publicly visible ways?

      Granted, they didn’t blockade them, but if those interceptors had been a bunch of medium range nuclear missiles pointed at various Chinese cities you can bet the response would have been similar.

      Reply
  11. michael hudson

    I think that America’s act against China borders on military aggression. The US is saying, “Don’t deal with any country that we’re imposing sanctions on. We want to grab Iran’s oil. That’s why we overthrew Mossedegh. That’s why we installed the Shah and his police state. We want Saudi Arabia’s money, and they told us we have to support the Sunni against Shi’ites, so our foreign policy is that of Saudi Arabia when it comes to the fate of who can and who cannot trade with Iran. China must follow our orders or we will do everything we can to stop its own development. It need only look at how we treated Iran to see what may be in store for it.”
    This raises the Cold Wa to a new dimension.

    Reply
    1. tricia

      “I think that America’s act against China borders on military aggression.”
      Agree. US using everything in their arsenal (one wonders if there might be tit for tat arrests coming and then trades, much like with spies in the old Cold War, though I doubt it as the US is every day more clearly the global bully to anyone paying attention and playing that game wouldn’t help China).

      Sp obvious this isn’t just about sanctions violations, despite “smoking gun.”
      When I read (above, in post) China having a hissy fit, I think, who???

      Reply
  12. Steve

    We all know that IPR theft is real. However, when it comes to 5G tech based on filed patents and contributing to creation of global standards, it looks like Huawei is also doing real innovation. “After summarizing, there are 103 families of declared standard patents with polar codes, distinguishing patentees: Huawei owns 51 families of patents, accounting for 49.5% of the total; followed by Ericsson, which owns 26 families of patents, accounting for 25.2% of the total.” http://www.eenewseurope.com/news/huawei-honours-turkish-professor-5g-polar-codes-0?

    Reply
  13. rosemerry

    Please tell me if this is feasible, but I read that if China really wants to get back at the USA it could manufacture huge amounts of products, ignoring patents and undercutting the prices so that the products are popular and are bought. This would be on a huge scale. Could it be done and not stopped???

    Reply
    1. Noneofmany

      That would almost certainly trigger an American alliance with Europe to tarrif their goods from both sides. China can’t rip up IP and dump goods like that without hurting the EU and other countries countries on the supply chain as well.

      If that happened I wouldn’t be surprised if Trump suspended semi conductor exports to them.

      Having a major player do that would cause a global free for all.

      Reply
    2. ewmayer

      ‘I read that if China really wants to get back at the USA it could manufacture huge amounts of products, ignoring patents and undercutting the prices so that the products are popular and are bought.’

      They still need to *export* those products, and – as with the trade war vs the US, where the massive imbalance gives the US leverage – that is where they are vulnerable. If they tried such an IP-flouting, product-dumping strategy the US and EU would likely counter quickly and forcefully. The mere threat of loss of access to those huge export markets is a very Big Stick.

      Reply
  14. Jason

    Essentially an overt act of war on the part of US to enforce its Iran sanctions. US takes the view that its laws apply to other countries. Works OK on the small ones but this is China. Will likely lead to China openly defying US Iran sanctions and we end up with the trade equivalent of the Korean war.

    If the US is after a cold war with China then arresting Meng makes perfect sense, otherwise its a Douglas MacCarthur moment of stupidity that will have dire consequences.

    Reply
    1. Noneofmany

      If I’m reading this correctly the case against her is strong and Canada is just following an ordinarily extradition processes.

      China, by the way, has no qualms about using arrests of foreigners under dubious circumstances as a kind of political theater.

      Google high profile arrests of foreigners in China, like the mentally disabled British citizen tricked into smuggling drugs that was executed, even though Chinese law prohibits the sentence for those found incompetent.

      Or the Australian businessman, also executed, found guilty of corruption.

      Both countries asked for extradition and were told, in no uncertain terms “Chinese soil, Chinese law. Tough”.

      Reply
    2. Noneofmany

      American laws apply to foreigners when they are in America, have a business operating in it. Or are in a country that has a treaty specifying their extension into their territory.

      Reply
  15. RMO

    I wonder if Huawei will get the message here – that they’re not offering anywhere near enough lucrative consultancy gigs and board positions to out-of-office U.S. politicians and powerful former government employees. They’re just not coughing up the fees required to be immune from arrest.

    Reply
    1. fajensen

      Maybe Chinese intelligence services should consult with an expert like Jeffrey Epstein on how to stay out of jail?

      Reply
  16. Blue Pilgrim

    I’ve seen numerous Chinese kung fu movies, and many have plots are centered on events of over a thousand years ago. Also, a common plot is a kid whose family is killed by some bad guys, spends the net 20 years learning kung fu, and then takes revenge. The Chinese have very long memories, and are patient.

    There is also the normal practice of establishing a personal relationship with people before doing business, and some emphasis on loyalty.

    Thirdly, there is great importance on ‘saving face’, and this is offensive and a gross insult to China, as well as the individuals involved.

    Americans are infamous for ignoring cultural differences and importance. I would not be surprised to see this take on far more importance, both short and long term, than many now think. For one thing, it should be understood that even more vulnerable that China is to losing sales to the US, the US is vulnerable to losing the products China produces, not just needed consumer goods which the US can’t manufacture domestically in quantity (and largely neither can anyone else) but including many used by the US military. How long would American patience last if most of the products they buy are no longer on the shelves, as well as prices going higher, in part because tariffs? And China has a state controlled economy, which can respond far more quickly to changes than the US or Canada can (and China has already said it is preparing for war — as has Russia).

    It’s hard to know what all this may trigger.

    Reply
  17. F.Korning

    definitely a casus beli,
    but it’s hard to see what goals can be achieved here. the only thing that comes to mind is ecen more sinister, ie force the chinese to accept a deal for bilateral spying implants and intercepts.

    Reply
  18. Kathleen T Smith

    People do not get how disgusting and dangerous a country like China really is — this is the CCP I am talking about not the Chinese people. This evil communist leadership that conducts massive surveillance on its own people (that makes the West look tame) — it has strict capital controls and it has “re-education centers” for those that don’t like to follow the rules. Those leading China are murderous criminals , remember it was the CCP that murdered 50 million of its countrymen. If this was the Nazi party running a country, I do not think people would be speaking so fondly of it. China breaks ever rule in the fucking book, just look at how it repeatly makes counterfeit and sometimes lead tainted products and puts them on the market. They are CORRRUPT and EVIL.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *