Ron Paul: Arrest of Huawei exec will leave USA powerless & broke

Not playing around

Not playing around

It wasn't until Wednesday that the world learned that Meng Wanzhou, chief financial officer of Chinese telecoms giant Huawei, had been detained on Saturday in Canada at the behest of United States authorities.

A senior Chinese telecoms executive committed fraud when she lied about links between Huawei and a shell company used to sell telecommunications equipment to Iran in breach of United States sanctions, Canadian prosecutors have told a Vancouver court.

The arrest was made at Washington's request as part of a United States investigation of an alleged scheme to use the global banking system to evade USA sanctions against Iran, according to people familiar with the probe. While there is some fear that the arrest could hurt talks between the US and China to end the current trade war between the two countries, Canadian prosecutors have called Ming a flight risk and have requested that the court place her in a detention center.

The arrest, revealed by Canadian authorities late on Wednesday, was part of a United States investigation into an alleged scheme to use the global banking system to evade American sanctions against Iran, sources say. "SkyCom is Huawei", he told the court.

Meng arrived in the packed Supreme Court of British Columbia on Friday as dozens of photographers jostled outside the building.

If an application is successful she faces a maximum jail sentence of 30 years for each charge if convicted. "If the US does what it did to ZTE, there's very little China can do to prevent Huawei from collapsing, and that's not in China's interest".

"We strongly reject any accusations that our company may pose any security risks", Huawei said in a statement.

Japan is planning to halt government purchases of equipment from China's two largest telecommunications firms, Huawei and ZTE, amid security concerns, Yomiuri Shimbun reported Friday.

The latest flare-up with Huawei comes after Meng's arrest last Saturday, which experts say marks a tougher stance in Washington on dealing with Chinese tech firms, amid longstanding concerns over cyberespionage.

Canadian officials have said Ottawa was continuing to review Huawei´s technology for use in upcoming fifth-generation networks.

Meng was arrested in Vancouver on 1 December and appeared in one of the city's courts on Friday, where prosecutor John Gibb-Carsley asked the judge to deny her application for bail.

The US and Chinese tech industries depend on each other so much for components that "it is very hard to decouple the two without punishing US companies, without shooting ourselves in the foot", said Adam Segal, cyberspace analyst at the Council on Foreign Relations.

In a sign Meng's case might not derail the Trump-Xi truce, Beijing protested Meng's arrest but said talks with the Trump administration would go ahead.

"If you have infinite resources, the value of pledges diminishes", the lawyer representing Canada's attorney general said. Moreover, US authorities believe that Huawei's top managers began avoiding travel to the US around April 2017 after becoming aware of the US criminal probe.

It is within the context of the broader economic clash between two industrial powers, and the 90-day window allocated to resolve it, that Meng's arrest should be viewed, according to Marshall Mays, director of Emerging Alpha Advisors Limited.

"China has more incentive than the U.S.to stop the escalation", said Yanmei Xie, an analyst at the Gavekal Dragonomics consultancy in Beijing.

Huawei, he explained, is one company the USA has been particularly concerned about. She's likely his heir apparent.

"The threat from these companies lies in their access to critical internet backbone infrastructure", she said.

Earlier this week, Britain's BT Group announced that it was removing Huawei Technologies equipment from 3G and 4G networks as well as banning it from core parts of the coming 5G network.

Ms Meng, who also used the English names Cathy and Sabrina, served on the board of Skycom between February 2008 and April 2009, according to Skycom records.

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