ANTHONY PUN. The arrest of Huawei CFO Sabrina Meng in Canada.

Dec 14, 2018

The arrest of Meng Wanzhou (Sabrina), the CFO of Huawei, has sent shock waves in China.  It would appear that the US-China Trade Cold War has escalated to new level of conflict which involves the arresting of personnel.  Canada is the accessory to the “kidnapping” of Meng on behalf of her American master by choosing on which side the bread is buttered.  Trudeau’s action has put the China Panic into Canada and questions whether this short term gain is more attractive than the long term loss of service revenue with China.  A lateral plan to escape this uncertain diplomatic dilemma has been suggested by one Chinese Canadian. 

On 6 December 2018, The Sydney Morning Herald (SMH) broke the news that Huawei CFO Meng Wanzhou had been arrested in Canada and was facing extradition to the US.  This was welcome news for senior US politicians.  Although the Canadian government has remained tight lipped about the arrest, the world was guessing that the arrest had to do with breaking the Iranian sanctions imposed by the US.  The Chinese responded by saying the arrest was politically motivated.  The arrest has deepened the conflict between the US and China.

The arrest attracted a wide range of comments from immigrants of Chinese descent living in the West and are illustrated below:

From Australia:  It is difficult to understand how an American law can be applied to a foreign national. When the US can cast her jurisdiction globally, other superpowers will follow and before long senior corporate personnel would be arrested on reciprocal grounds and the Trade Cold War would escalate.

US-DPRK normalization depends on the goodwill of China and the arrest of Meng will stall the process.

The Canadian action will sour her trade relations with China.

From Canada: Trump cannot hold more than one thought at a time. I believe that this is the work of Bolton and his cronies. I’d like to see this case go all the way to the minister for a decision. This is political. Let’s see if our Minister of External Affairs has the balls to stand up to the US Administration.

The best case scenario is that the Judge in Vancouver has the courage and wisdom to conclude that the charges by the US have no merits and set Huawei’s CFO free. In this way it would have fulfilled its part of the extradition agreement with the US and also show the rest of the world that it has the courage to stand up to the USA.

From New Zealand:  Canada should not be in cohort with the US in this arrest and extradition game.  Canada can arrest someone who has committed a crime in its own territory but to do so on behalf of the US, for an alleged ‘crime’ of misleading some American banks over the identity of a company, is beyond the pale.

It’s all about commercial competition and the trade war. The US is behaving just like the mafia to kidnap a hostage for ransom.

The real pressure Canada is under is fear of repercussions from the US over the trade sanctions on Iran. How different is this from the argument of Trump siding with MBS over the murder?

The trade sanctions, which the US is using at its whim and fancy, are a commercial WMD and even more inhumane than nuclear or chemical weapons. They should be banned altogether or at least only available to the UN to use. If the US applies sanctions against Iran it should only affect US business and not any third party. The current practice is a violation of the other countries’ sovereignties. Where is the logic? (End of Comments)

The Chinese are getting very serious about this arrest and the Australia China talks in Beijing led by former PM John Howard were confronted with repeated questions on the Huawei CFO arrest.  These curly questions are unavoidable since Australia is a member of Five Eyes and had banned Huawei in the 5G project.  It would not be unusual for the Chinese to exert some pressure on Australia and keep her neutral on this matter.

On Sunday, 9 December 2018, the South China Morning Post carried the headline “Beijing blames Canada for Huawei arrest and threatens grave consequences for hurting feelings of Chinese people”.

The arrest of Meng in Canada, which took place on the same night that Chinese President Xi Jinping and US President Donald Trump dined together in Buenos Aires, has infuriated Beijing. A possible loss of face and embarrassment for President Xi has happened intentionally or otherwise.

The official Xinhua news agency published an editorial on Sunday morning condemning the arrest as an “extremely nasty” act that had caused “serious damage to Sino-Canada relations”. China also summoned the Canadian envoy on the matter of the detention of Huawei executive Meng Wanzhou.

Looking at the trade figures, the top three trading partner of Canada are the US (US$319.6 billion – 76% of total Canadian exports, China (US18.2 billion -4.3%) and the UK (US$13.6 billion – 3.2%).  It is obvious from these trade figures that Canada had to toe the US line when three quarters of Canadian exports go to the US, not to mention the recently signed trade agreement between the US and Canada at the G20 summit in Argentina.

Canada may be able to lose 3.2% of her total exports to China but it will also lose billions in services due to visiting Chinese tourists and Chinese international students.  China recorded imports of travel services from Canada of US$23.7 billion in 2016. Can she afford to lose these additional revenues?

It looks like our Chinese Canadian solution is a finding by a Canadian Judge that, under Canadian law, there is no merit in the extradition request by the US.

China has patience and will restrain from acting harshly until Sabrina Meng is extradited to the US.

Dr Anthony Pun OAM is National President of the Chinese Community Council of Australia Inc.

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