Canada Arrests Huawei Executive; China Demands Her Immediate Release

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The FTSE 100 was called 71 points lower

"The rapidly dwindling good-feeling towards the USA and China's vague trade war ceasefire turned actively hostile on Thursday, investors fearing that, 90-day truce or not, the relationship between the two superpowers might be about to take a turn for the worse", he wrote.

An anonymous Canadian law-enforcement source told The Globe and Mail that the United States is alleging Meng tried to evade US sanctions against Iran.

Only minimal details are out yet, but as per some sources, she was arrested on December 1st in Vancouver and will have a first bail hearing on December 7th.

"The arrest comes against a backdrop of concerns about trade and technology as well as cyber security when using Chinese hardware for IT systems", said Michael Hewson, analyst at CMC Markets. In April, China appealed to Washington to avoid damaging business confidence following the Wall Street Journal report that USA authorities were investigating whether Huawei violated sanctions on Iran amid spiraling technology tensions.

Jasper Lawler, head of research at London Capital Group, responded: "Traders have quickly moved out of riskier assets reflecting nerves that the arrest is likely to escalate tensions between the United States and China once again".

A Chinese government statement said Meng broke no USA or Canadian laws and demanded Canada "immediately correct the mistake" and release her.

As well as the CFO, she is deputy chairwoman of Huawei and a daughter of the company's founder. Huawei is by far China's most global technology company, with operations spanning Africa, Europe and Asia.

Chinese officials are loudly calling for Meng's release and want Canada to reveal the reason for her arrest.

In a statement issued exclusively to the News from Huawei's corporate head office, the company explained how Meng was "provisionally detained by the Canadian authorities on behalf of the United States of America, which seeks the extradition of..."

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It doesn't end there, because some major MVNO (virtual networks) that piggyback O2 signals are experiencing the same disruption. O2 issued the following statement on its website : "Our technical teams are investigating reports of issues when using data".

In a statement, Huawei said it had complied with "all applicable laws and regulations where it operates, including applicable export control and sanction laws and regulations of the UN, US and European Union". The Globe and Mail newspaper cited law enforcement sources as saying she is suspected of trying to evade US curbs on trade with Iran. ZTE Corp., another Chinese technology company, almost collapsed due to USA penalties for violating Iran sanctions before Trump rescued it following a request from Xi.

The Chinese Embassy in Canada condemned the detention of Ms Meng denying she had violated Chinese or United States laws.

Over the years, she has been director of the global accounting department, chief financial officer of Huawei Hong Kong and president of the accounting management department at the company.

The US sees Huawei and smaller Chinese tech suppliers as possible fronts for spying and as commercial competitors.

China's embassy in Canada said it resolutely opposed the arrest and called for Meng's immediate release. Trump restored access after ZTE agreed to pay a $1 billion fine, replace its executive team and embed a US-chosen compliance team in the company.

Despite being essentially barred from the critical U.S. market, Huawei surpassed Apple to become the world's number two smartphone maker in the second quarter of this year and has market leader Samsung in its sights. -China relations, it was not clear if the timing was coincidental.

But casting Huawei as the Chinese equivalent of Apple understates its reach and importance - Huawei also manufacturers a tremendous amount of the equipment used by phone and internet companies, as well as providing IT consulting services both in China and around the globe. The US, Australia and New Zealand have blocked the use of the Chinese firm's equipment in infrastructure for new faster 5G mobile networks.

What are the Iran sanctions?

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