Arrest of Meng Wanzhou Further Roils U.S.-China Relations

Bloomberg has an excellent piece, "China's Ire Finally Flares as U.S. Opens Huawei CFO Case."

And at the Los Angeles Times, "The arrest of a top Huawei executive is 'a shot into the heart' of China's tech ambitions, analysts say":

The arrest of a top executive at one of the most successful Chinese global companies threatens to upend a delicate detente between the U.S. and China in their months-long trade war.

Meng Wanzhou, deputy chairwoman and chief financial officer of telecommunications giant Huawei, was arrested Saturday during a transit stop at a Vancouver airport and could face possible extradition to the U.S. and an appearance in federal court in New York.

A U.S. law enforcement official, who was not authorized to discuss the case by name, said the action against Meng involves violations of U.S. sanctions against Iran. Another U.S. official described the violations as serious. Neither official provided specifics.

The arrest comes at a sensitive time as Washington and Beijing aim to strike a trade deal before March 1. White House officials told CNN that Meng could be used as leverage in trade talks. It’s unclear whether President Trump knew about the arrest in advance, though national security advisor John Bolton told National Public Radio that he did.

Now any trade agreement has to overcome what will probably be viewed as a provocation in the eyes of China’s leadership, given Huawei’s importance.

“Huawei embodies the existential angst of China hard-liners in the U.S. concerned about China's ostensible grand plan for global domination of new high-tech industries,” said Eswar Prasad, a professor of trade policy at Cornell University. “Meanwhile, such actions by U.S. and other governments crystallize fears among Chinese leaders that the real intention is to hold back China’s economic progress and transformation.”

China demanded the immediate release of Meng, who is among the cream of China’s corporate elite. She is the daughter of tech billionaire Ren Zhengfei, Huawei’s founder and CEO and a former engineer in the People's Liberation Army.

Chinese officials said she had not broken any laws, accused the United States and Canada of violating her rights and demanded an explanation as to why she was arrested.

Huawei said in a statement it was unaware of any wrongdoing by Meng.

Chinese state media accused the U.S. of harassing Huawei to gain advantage in the worldwide competition for control of next-generation 5G cellular networks.

U.S. officials have not officially confirmed the reasons for Meng’s arrest. The U.S. has long considered Huawei a front for the Chinese government and military.

The arrest “wasn't a shot across the bow, but a shot into the heart of the ship” because Meng was basically considered an official of the Chinese government, a former U.S. official involved in national security matters said, speaking on condition of anonymity.

President Trump and Chinese President Xi Jinping agreed Saturday to suspend planned tariff hikes for 90 days to allow negotiations on a deal to end the trade conflict.

In a sign that China wanted to push for a deal despite anger over Meng’s arrest, officials said Thursday that trade talks would go ahead on agricultural products, automobiles and energy.

Meng’s arrest, significant because of her elite connections and prominent corporate position, triggered shock in China. The arrest is doubly sensitive because it threatens the rise of one of China’s top cutting-edge brands, now the world’s second-largest smartphone company, surpassing Apple in sales this year.

The state-owned Global Times reflected Chinese outrage over her arrest in an editorial accusing Washington of “resorting to a despicable rogue approach” in a bid to hurt the company. The paper also tweeted Thursday that China should be ready for an escalation of the trade war, warning that Meng’s arrest was vivid evidence that Washington would not soften its stance against Beijing.

“It is clear that Washington is maliciously finding fault with Huawei and trying to put the company in jeopardy with U.S. laws,” the editorial said.

Washington is demanding sweeping changes to China’s industrial policy, in particular its state support for key high-tech industrial firms, forced transfers of technology by American companies doing business in China, and tolerance or tacit encouragement of intellectual property theft...

Still more.