Trade war fears trigger markets bloodbath


The arrest of Huawei CFO Meng Wanzhou in Canada on Wednesday brought the Chinese telecom giant's business practices under global scrutiny and raised questions about the state of tenuous trade negotiations between the us and China.

In latest, Canadian law enforcement has arrested Huawei CFO Wanzhou Meng from Vancouver while she was changing her flights.

The charges against Meng - the daughter of the telecoms company's founder - remain unknown, but could relate to a possible violation of sanctions against Iran. Reuters was unable to determine the precise nature of the violations. In a report released by the U.S. Permanent Select Committee on Intelligence in 2012, Huawei and ZTE Corp. were tagged as potential threats to U.S. security interests.

Huawei is one of the largest telecommunications equipment and services providers in the world, recently passing Apple to become the second-biggest smartphone maker after Samsung.

Stocks on both the Chinese mainland and in Hong Kong tumbled after news of the arrest, with tech firms taking the brunt of the selling of shares. Hong Kong's Hang Seng lost 2.5 per cent and the DAX in Germany sank 1.8 per cent.

MSCI's benchmark for global stocks declined 0.61 percent, and US markets were on track to open lower by 1 percent or more. On Wall Street, the broad-based S&P Index closed down 0.31 percent after making up steep early losses.

Huawei is one of the largest tech companies in the world, but it has been under pressure in nations like the U.S., U.K., and Australia for allegedly doing the bidding of the Chinese government. It has been locked out of the United States and some other markets for telecom gear.

The ministry said the USA is seeking her extradition and she faces a bail hearing on Friday, adding it could not provide further details due to a publication ban that was sought by Meng, whose father, Huawei founder Ren Zhengfei, is a former Chinese People's Liberation Army engineer. Trump and Xi had dined in Argentina on December 1 at the G20 summit.

"China's discussed these things with the U.S. many times down through the years and the results have not been very good".

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Meanwhile, Huawei said that it has received little information about the case and was not aware of any wrongdoing on the part of Meng.

The News understands that an arrest was made at or near Vancouver Airport on Saturday.

Aly Song / Reuters A man walks by a Huawei logo at a shopping mall in Shanghai, China, Dec. 6.

Thus far, China has demanded that Canada and the US drop the case and release Meng immediately, accusing the North American nations of harming her human rights.

However, the arrest drew a swift response from China, which said it "firmly opposes and strongly protests" the move, adding it had urged Canada and the USA to "immediately correct the wrongdoing". It's not an isolated incident, but rather the latest chapter in a long history of tension between China's smartphone and telecommunications giant and the US government and businesses. "I think because of the super-delicate phase that we're at in terms of U.S". Australia and New Zealand have also rejected Huawei's products.

However, according to the Globe and Mail, she was arrested on suspicion she violated USA trade sanctions against Iran. This time, the focus of the friction is on Meng Wanzhou, scion of a Chinese telecommunications giant.

Worse still, the continuing negotiations in the US-China trade war have only been set aside in recent days on a temporary basis and this move is likely to be seen by China as extremely inflammatory to the talks. Most people held on US warrants are extradited quickly, he said in an interview. "Actually it hurts them to make life difficult" for USA companies.

China on Thursday demanded Canada release a Huawei Technologies executive who was arrested in a case that adds to technology tensions with Washington and threatens to complicate trade talks.