Beijing Summons US, Canadian Ambassadors Over Arrest of Huawei CFO

Beijing is not amused over the December 1st arrest of Huawei CFO Meng Wanzhou, who is the daughter of the tech firm’s founder. The situation escalated over the weekend. On Saturday, the Chinese Foreign Ministry summoned Canadian ambassador to China, John McCallum, to Beijing. This move was followed on Sunday by a summons for his US counterpart, Terry Branstad. Needless to say, US equity futures have taken a nosedive overnight – again.


In a statement summoning McCallum to Beijing, China’s vice minister of foreign affairs, Le Yucheng, said Meng’s arrest “severely violated the Chinese citizen’s legal and legitimate rights and interests, it is lawless, reasonless and ruthless, and it is extremely vicious.” He also warned Canada of “serious consequences” if it doesn’t release Meng and pressured Canada to “release the detainee immediately and earnestly protest the person’s legal and legitimate rights and interests, otherwise it will definitely have serious consequences, and the Canadian side will have to bear the full responsibility for it,”

Le said the summoning of the US ambassador is part of Beijing’s “strong protest against the US’s unreasonable direction to Canada of detaining the Huawei executive” and asks that the US “revoke the arrest warrant against Meng and allow her to be freed.”

A US warrant for Meng’s arrest was issued in August and Meng has avoided all travel to or through the US since then. The US has charged Meng with fraud relating to her efforts to evade US Iranian sanctions. The US alleges that “Huawei used a shell company to access the Iran market in dealings that contravene U.S. sanctions. Meng assured U.S. banks that Huawei and the shell company alleged to have done business with Iran, called Skycom, were separate companies, but in fact Skycom and Huawei were one and the same.”


A bail hearing held in Vancouver on Friday failed to reach a conclusion and Meng spent the weekend behind bars. Meng, 46, is considered to be a flight risk and the hearing will continue today. Huawei issued a statement on Friday which said, “We will continue to follow the bail hearing on Monday. We have every confidence that the Canadian and US legal systems will reach the right conclusion.” The statement also said the company was “not aware of any wrongdoing by Ms. Meng” and that Huawei  “complies with all applicable laws and regulations where it operates.”

White House trade adviser Peter Navarro called Huawei a “bad actor” and said he considers Meng’s arrest to be “legitimate.” He added, “let’s look at what the indictment says and let the [Justice Department] do its thing.”

Meng’s arrest came shortly after trade talks between Trump and Xi had reached a better than expected result in the form of a truce. Trump had agreed to hold off on plans to raise tariffs on certain Chinese imports from 10% to 25% on January 1, 2019. Xi had agreed to immediately begin purchasing large quantities of a wide range of US products. US financial markets rallied over the news. When the story of Meng’s arrest broke and ever since, US market indices have plunged.


Xi released a statement shortly after Meng’s arrest stating that it was distressing, but said he would honor his agreement with Trump to start buying US goods. Meng’s continued detention in Vancouver casts doubt on his assurance.

Aside from discontinuing trade talks, US officials worry that Beijing might reciprocate by detaining prominent US citizens conducting business in China. Several US companies have “advised their employees against non-essential travel to China. And while the threats of Chinese bureaucrats might not amount to much in the eyes of US prosecutors, threatening a US executive with long-term detention in a Chinese “reeducation camp” just might.”



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