More countries threaten Huawei ban as arrest clouds US-China ties

Meng Wanzhou Executive Board Director at Huawei Attends the Vtb Capital's 'Russia Calling' Investment Forum in Moscow Russia on Oct. 2 2014. A Canadian prosecutor said on Dec. 7 2018 Meng faces charges for using 'fraud' to try

But informal conversations among attendees soon turned to possible risks in China prompted by the arrest of Meng Wanzhou, the chief financial officer and "heiress" of Chinese telecom network equipment giant Huawei Technologies Co Ltd, who was detained in Canada on December 1.

In a letter sent a day before the bail hearing of Meng Wanzhou, its chief financial officer, in a Canadian court, it said: "We believe the USA government's tactics to exert pressure on a business entity is straying from the spirit of fair competition and free economy".

The lawyer said that Meng had personally denied to American bankers any direct connections between Huawei and SkyCom, when in fact "SkyCom is Huawei".

Canadian prosecutor John Gibb-Carsley said that the telecoms giant used a subsidiary, Hong Kong-based firm Skycom, to do business with Iran, bypassing U.S. sanctions.

Ms Meng's lawyer David Martin said the evidence presented does not prove she broke either United States or Canadian law. The court heard she was en route from Hong Kong to Mexico.

"In a previous Sputnik interview, I explained the differences between a hard and soft bluff and in this instance, [Donald] Trump was doing the soft bluff, meaning requesting Beijing make necessary changes, so he would not have to implement higher tariffs at the start of 1 January, 2019".

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"China talks are going very well", Trump said on Twitter on Friday, without providing any details.

The case is the latest development in a surprising legal wrangle that raises doubts about whether a US-China trade cease-fire can hold.

U.S. President Donald Trump on Friday sounded an optimistic note about trade negotiations with China as two of his top economic advisers downplayed friction from the arrest of a senior executive of Chinese telecom equipment maker Huawei Technologies.

Meng's surprise arrest on Saturday is the latest salvo in a feud over trade and technology that has pitted the U.S. against China, with Canada caught in the middle.

A senior diplomat from the USA embassy in Singapore gave opening remarks, but an embassy spokesperson said she left before any discussion.

The outpouring of conflicting sentiments - some Chinese have demanded a boycott of USA products while others have expressed anxiety about their investments in the United States - underscores the unusual, politically charged nature of the Trump administration's latest move to counter China's drive for technological superiority.

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The Canadian prosecutor said this was untrue.

United States lawmakers have repeatedly accused the company of being a threat to United States national security.

The US and Chinese tech industries depend on each other so much for components that "it is very hard to decouple the two without punishing US companies, without shooting ourselves in the foot", said Adam Segal, cyberspace analyst at the Council on Foreign Relations.

"Detaining a person without providing an explanation has undoubtedly violated her human rights", Geng stressed, specifying that Beijing had sent clear signal to both the U.S. and Canada over the case. OSAC promotes "security cooperation between American private sector interests worldwide and the U.S. Department of State", according to its website.

"The threat from these companies lies in their access to critical internet backbone infrastructure", she said. The company has said it complies with all applicable export control and sanctions laws and other regulations.

USA intelligence agencies also allege that Huawei is linked to China's government and that its equipment could contain "backdoors" for use by government spies.

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"China has more incentive than the U.S.to stop the escalation", said Yanmei Xie, an analyst at the Gavekal Dragonomics consultancy in Beijing.

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