Shares plunge over Huawei arrest trade war concerns

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Dow futures slide after the arrest of Huawei CFO Meng Wanzhou in Canada; Doug McKelway reports from the White House.

The ministry said the US is seeking her extradition and she faces a bail hearing today, adding that it could not provide further details due to a publication ban that was sought by Meng, whose father, Ren Zhengfei (任正非), is a former Chinese People's Liberation Army engineer.

"And they took this decision without any political involvement or interference".

Worse still, the continuing negotiations in the US-China trade war have only been set aside in recent days on a temporary basis and this move is likely to be seen by China as extremely inflammatory to the talks.

"The Chinese side firmly opposes and strongly protests over such kind of actions which seriously harmed the human rights of the victim", China said in a statement on its Canadian embassy's website.

Foreign ministry spokesman Geng Shuang told reporters today that the Chinese government also wants Canadian officials to reveal the reasoning behind Meng Wanzhou's arrest in transit on Saturday.

"The company believes the Canadian and USA legal systems will ultimately reach a just conclusion", said a statement from Huawei.

Huawei released a statement saying its CFO was arrested while changing planes in Vancouver and is facing charges in "the Eastern District of NY".

The U.S. government came to this conclusion after an 11-month investigation into the company and its rival ZTE Corp.

It added that it complies with all laws and regulations where it operates, including global sanctions.

The US and Canadian governments haven't specified what charges Meng faces.

A person who knew about the incident told Reuters the arrest is linked to reported violations of American restrictions on Iran by Huawei.

Huawei is the world's biggest maker of equipment for cellular towers and Internet networks, and the company is the world's second most popular smartphone brand. "The Chinese government should seriously mull over the US tendency to abuse legal procedures to suppress China's high-tech enterprises".

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Sen. Mark Warner, who wrote a letter alongside Rubio to Canadian Prime Minister Trudeau in October asking him to reconsider including Huawei in its country's 5G network, urged the Trump administration to hold the Chinese telecommunications giant "accountable". Chinese technology has been a particular bugbear for the US president, who has justified imposing tariffs on Chinese imports with allegations of intellectual property theft by Chinese companies.

"(Canada) arrested a Chinese citizen (who did not violate) any Canadian or American law", the statement said. If she chooses not to fight, she could be in the United States within weeks, experts said.

Meng's bio on the company website says she joined in 1993 and held various positions across the company, including director of global accounting and CFO of Huawei Hong Kong.

Reuters reported that the USA has been investigating the tech giant for using the global banking system in an effort to evade Washington's sanctions targeting Iran.

The Globe and Mail newspaper, citing law enforcement sources, said she is accused of trying to evade USA curbs on trade with Iran. This is something that we get from the Justice Department.

Huawei, one of the world's biggest suppliers of network gear used by phone and internet companies, has been the subject of deepening security concerns within the USA government and the governments of countries like Australia and New Zealand.

Why is Huawei a concern to the West?

It's still unclear how Meng's case will play out, but it could undermine talks between the United States and China aimed at defusing their damaging trade war.

Australia and New Zealand have effectively banned Huawei gear from the latest generation of their mobile networks while others such as the United Kingdom and Germany may follow suit due to worries it could be outfitted to spy on their host nations.

Earlier this year, six top USA intelligence chiefs voiced their concerns about Huawei phones to the Senate Intelligence Committee, with FBI Director Christopher Wray saying he was "deeply concerned about the risks of allowing any company or entity that is beholden to foreign governments that don't share our values to gain positions of power inside our telecommunications networks".

Mulroney said the Meng case has brought Canada and China to an inevitable reckoning in their relationship.

In exchange, ZTE agreed to pay a hefty US$1 billion (RM4.17 billion) fine and put an additional US$400 million in escrow in case of future violations.