The Hotchkiss Record

Canada Arrests Huawei’s CFO

Meng Wanzhou, chief financial officer at Chinese tech giant Huawei and daughter of the company’s founder Ren Zhengfei, was in transit when she was arrested by Canadian officials at Vancouver International Airport on December 1, 2018. Due to a publication ban granted by the courts at Meng’s request, the details of the charges against her have not been released.

The United States is seeking to extradite Meng on charges related to defrauding U.S. financial institutions issued from the Eastern District of New York. A bail hearing was held in the British Columbia’s Supreme Court on December 7, 2018, in which Canadian authorities accused Meng of fraud. They alleged that she had “direct involvement” with Huawei’s business in Iran. Meng was later granted bail of 10 million Canadian dollars by Justice William Ehrcke.

The arrest comes at a time when the U.S. has been investigating Huawei for violating U.S. sanctions on countries such as Cuba, Iran, Syria, and Sudan. The U.S. initially inquired into Huawei’s business practices in 2017. Since then, Huawei’s share of the global smartphone market has continued to grow. Government officials have increasingly expressed security concerns related to Huawei’s products, especially the fear that the Chinese government may be able to access U.S. infrastructure using Huawei’s devices. 

The arrest occurred on the same night that President Donald Trump and Chinese President Xi Jinping dined together in Buenos Aires and agreed to a 90-day truce in the ongoing trade war between the U.S. and China. This negotiation now faces a crisis, as the tension between the two sides is rapidly escalating. Beijing is likely to pressure the U.S. to release Meng. If the U.S. declines, efforts made to end the trade war may fail. The White House did not immediately respond when asked if the President was aware of the detention during his dinner with President Xi.

The U.S. currently plans to move forward with the extradition, although government officials have not yet provided any evidence of criminal activity. Harry Li ’20 said, “If you want to arrest other countries’ citizens, according to international law you have to have proof that this person has committed crimes. And if Meng really has, then [extradition] is justified. But I believe that governments can do whatever they want in their own countries.”

Tensions between China and Canada have also increased since Meng’s arrest. On Monday, January 14, the Chinese government sentenced Robert Schellenberg, a Canadian citizen facing accusations of drug smuggling in China, to death. Schellenberg had been detained in China for four years prior to his retrial. Unlike usual trials in China, Schellenberg’s retrial was made public, in what many described as a political move. Carter Moyer ’20 said, “It’s hard to see [the sentencing] as anything less than retribution for Meng’s arrest.”

The political context of the retrial leaves some wondering if Schellenberg will ever receive justice. Professor Donald C. Clarke, a specialist in Chinese law at George Washington University, said, “We should draw the conclusion that the Chinese government very obviously wants us to draw: this is a political case. Schellenberg’s fate will have nothing to do with his individual guilt or innocence.”

However, according to Edward Guo ’19, the Chinese government has historically been strict in punishing both foreigners and citizens for drug-related crimes. Guo said, “China and drugs are two things that just aren’t compatible. It actually isn’t that strange for people who committed drug-related crimes to be sentenced to death or life in prison.”

For Chinese citizens, the tensions surrounding Huawei have only added to the stress caused by the ongoing trade war. In the past year, China’s economy displayed the slowest growth rate in over three decades. This slowdown has impacted the everyday life of the general public in China. “Some things have gotten more expensive, and it’s unfortunate to see that,” Guo said. “The relationship [between China and the U.S.] makes it tough, even for students. The Chinese government from time to time uses overseas students as a leverage, because [they] are a way that the United States is making money off of China.”

Despite recent talks between President Trump and President Xi, relations between China and the U.S. remain strained. Moyer said, “These developments do give me pause in visiting China. I know I am not going to be arrested should I go over there on an exchange, but [China] is far from [welcoming].”

Last Monday, the U.S. Justice Department officially filed criminal charges against Huawei. The charges accused the company of stealing T-Mobile trade secrets and violating U.S. sanctions on Iran.

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