China demands release of arrested Huawei CFO

The Chinese government has demanded the immediate release of Huawei CFO Meng Wanzhou, who was detained by the Canadian authorities on Saturday 1 December, saying her arrest is a breach of human rights.

The Canadians arrested Meng, who is also the oldest daughter of Huawei founder Ren Zhengfei, at Vancouver International Airport, and Ottawa has confirmed that it plans to extradite her to the US, with a hearing set for Friday 7 December.

“The detention without giving any reason violates a person’s human rights,” said a spokesperson for China’s Ministry of Foreign Affairs.

“We have made solemn representations to Canada and the US, demanding that both parties immediately clarify the reasons for the detention, and immediately release the detainee to protect the person’s legal rights.”

Meng has sought, and been granted, an injunction preventing publication of any details about the arrest, so it is not officially known on what charges the US is seeking her extradition.

However, the US has been probing the networking supplier for some time over suspected breaches of sanctions against Iran, something that was later confirmed by US senator Ben Sasse, a member of the Senate Armed Services Committee.

“Americans are grateful that our Canadian partners have arrested the chief financial officer of a giant Chinese telecom company for breaking US sanctions against Iran,” Sasse told AP.

Analysts at the Eurasia Group, a geopolitical risk consultancy based in New York, told CNBC that Meng’s arrest risked seriously corroding already fraught trade talks between Beijing and Washington.

Although Chinese president Xi Jinping and his US counterpart Donald Trump had begun tentative steps towards rapprochement at the recent G20 summit in Argentina, the crisis will hang over any further negotiations between the two.

Huawei had not responded to a request for comment at the time of writing.

Meng’s arrest comes during a difficult period for Huawei, one of China’s most prominent technology companies, as western countries act on national security concerns prompted by the firm’s long-standing ties to the Chinese government.

Besides bans on the use of its equipment within future 5G networks enacted by Australia, New Zealand and the US, it has also emerged that in the UK, BT is currently stripping Huawei hardware out of EE’s 4G mobile network, and will limit its inclusion in its 5G network.

Shortly before Meng’s arrest, the Eurasia Group published a report examining how political forces – including an escalating so-called “tech cold war” between the US and China – are shaping the creation of 5G mobile networks in key markets, and speculated that this could have damaging implications for the rest of the IT industry.

The report warned that efforts by the US and its Five Eyes signals intelligence allies (Australia, Canada, New Zealand and the UK) to exclude Chinese suppliers such as Huawei from western 5G networks would continue, and is likely to delay 5G deployment in some countries.

This is because Chinese companies such as Huawei have been very successful in establishing first-mover advantage around 5G networks, which means alternative suppliers would need to invest rapidly to introduce 5G cost-effectively and at scale.

Extrapolating further ahead, the Eurasia Group’s head of geo-technology and report co-author Paul Triolo warned that a divided global 5G network would increase the risk that other parts of the global technology ecosystem dependent on the network – such as autonomous vehicles and telemedicine – would split, giving way to “two separate, politically divided and potentially non-interoperable technology spheres of influence”, one led from Silicon Valley, the other from Shenzhen.

Countries wanting to gain access to two parallel systems would face a hard choice between the two, and Triolo said it is likely that cost-conscious developing states will find Chinese technology hard to pass up, especially when presented alongside enticements such as the Belt and Road Initiative, putting the US-led ecosystem at a disadvantage.

“The political struggle around 5G deployment will define the debate around how, when and where the next generation of the internet will evolve,” he said.

“China has the companies, the technology, the focus and the market scale to lead the world in the development of applications for 5G.”