Huawei exec's arrest sends shudders through stock markets

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Huawei exec's arrest sends shudders through stock markets

The Wall Street Journal reported in April that US Department of Justice had opened an investigation into suspected violations of Iran sanctions by Huawei.

It also produces consumer electronics and this year overtook Apple to become the second-largest manufacturer of smartphones in the world, behind Samsung Electronics.

On broader markets Hong Kong was down more than two percent while Shanghai lost more than one percent and Tokyo shed 1.8 percent by the break.

"We'll see more cases like this over the next three months, sanctioning China's state-owned enterprises and individuals, to boost momentum on the U.S. side", Liu Weidong, a China-U.S. affairs expert from the Chinese Academy of Social Sciences, told South China Morning Post. Investors stampeded for the safety of government debt, pushing the yield on the US 10-year Treasury note back below 2.9 percent to its lowest level in three months. "Huawei has direct ties to the Chinese government and Communist Party, has long posed a serious risk to USA national security".

Officials in some governments, especially the United States, have expressed concern that his company is close to the Chinese military and government. He noted that there has been much concern about the suspicion that Chinese firms like Huawei use stolen United States intellectual property.

In a statement, Huawei, the second largest smart-phone seller globally after Samsung, said Ms Meng's extradition was prompted by unspecified charges in the Eastern District of NY when she was transferring flights in Canada. Trump and Xi had dined in Argentina on December 1 at the G20 summit.

Founded in China more than 30 years ago, Huawei's revenue in 2018 exceeded $100billion for the first time in its history, according to CNBC.

State-run China Daily said the arrest of Huawei's chief financial officer appeared to be part of USA efforts to contain the company, which is the world's largest telecoms equipment provider, as well as its second-largest mobile phone maker.

Despite that, her arrest is unlikely to derail trade talks, said Willy Lam, a politics specialist at the Chinese University of Hong Kong.

Mulroney said the blurring between state- and private-run enterprise within the Chinese economy presents a risk that Canada must learn to deal with, if it hopes to strengthen trade ties. "The Chinese side firmly opposes and strongly protests over such kind of actions which seriously harmed the human rights of the victim", the Middle Kingdom's officials said in a statement via their Canadian embassy.

A U.S. Justice Department spokesman declined to comment.

Following news of the event, which didn't break until Wednesday, speculation swirled as to whether the U.S. or Chinese presidents knew of the law enforcement action. A spokesman for the U.S. attorney's office in Brooklyn also declined to comment.

"China is already asking for her release, as can be expected, but if the charges are serious, don't expect the U.S. to blink".

"We can expect China to retaliate against Canada very vigorously", he said by email.

"The United States is stepping up containment of China in all respects", said Zhu Feng, an worldwide relations expert at Nanjing University. "Actually it hurts them to make life difficult" for USA companies.

Huawei Technologies Ltd., the biggest global supplier of network gear used by phone and Internet companies, has previously been the target of US security concerns.

In August, U.S. president Donald Trump signed an act to ban the use of Huawei components or services that are "essential" or "critical" to the systems they are used.

Buenos Aires is 5 hours ahead of Vancouver, where the arrest took place, so it is possible that the Chinese delegation was unaware. -China relations, it was not clear if the timing was coincidental.

As news of the arrest surfaced, lawmakers in Washington denounced Huawei for alleged links to China's communist leadership. ZTE got off with paying a $US1 billion fine, changing its board and management and agreeing to let American regulators monitor its operations.

Meng Wanzhou's detention comes after American authorities reportedly launched an investigation into suspected Iran sanctions by Huawei, which was already under scrutiny by USA intelligence officials, who deemed the company a national security threat.

Meng's arrest is related to alleged violations of U.S. sanctions, according to Reuters news agency.

New Zealand and Australia have stopped telecom operators using Huawei's equipment in new 5G networks because they are concerned about possible Chinese government involvement in their communications infrastructure.

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