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After Arrest In Canada, Huawei Executive Faces Extradition To U.S.

Dec 6, 2018
Originally published on December 7, 2018 12:48 am
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DAVID GREENE, HOST:

Canadian authorities have arrested the chief financial officer of the Chinese telecommunications giant Huawei. She also happens to be the daughter of the company's founder. Now, Canada made this arrest at the request of the U.S. government, which has been investigating whether the company violated sanctions on Iran. This arrest is provoking outrage in Beijing just as China and the U.S. begin delicate trade negotiations. Let's bring in NPR's Shanghai correspondent, Rob Schmitz. Good morning Rob.

ROB SCHMITZ, BYLINE: Good morning, David.

GREENE: So tell us more about this executive and why she's been arrested.

SCHMITZ: Her name is Meng Wanzhou. And she's not only the CFO of Huawei, as you mentioned, but she's the daughter of the company founder, Ren Zhengfei. And Huawei is China's most important tech company. It's the world's largest manufacturer of cellphone towers and Internet equipment. It also makes the world's second-most-popular smartphone. So it's kind of like the Apple of China.

GREENE: That puts things in perspective.

SCHMITZ: Yeah. And it has a very - but the way it's different is it has a very cozy relationship with China's government. Now, we do not know the charges against Meng yet, but this might have something to do with a U.S. criminal probe into Huawei's dealings in Iran. U.S. authorities suspect Huawei was involved in defying sanctions on Iran since 2016.

GREENE: Well, I mean, I can't help but ask you about the timing here. She was arrested on December 1, right? That was the same day President Trump was meant was meeting with Xi Jinping at the G-20 meeting in Argentina to try and make a deal on trade.

SCHMITZ: Yeah. Yeah. And it's really - this is the thing that's standing out to everyone. This is interesting timing. You know, as both countries seemed to work a peaceful truce to the trade war, this then happens that same day. You know, China, of course, is furious over this. And it's hard to think this will not have an impact on the negotiations as the U.S. and China try to hammer out a trade deal in the next three months.

I spoke to James McGregor about this. He's the greater China CEO of public relations firm APCO here in China. And here's what he said.

JAMES MCGREGOR: This is usually the kind of a move China does. You know, when China's got some tough political problem going, often it ends up arresting somebody - some foreigner, some, you know, Chinese who's now got another passport - and kind of holding them hostage.

GREENE: So, Rob, he's suggesting the Trump administration is going the way of China and making, like, a political arrest. I mean, is - could he be right here?

SCHMITZ: Well, if it were a political move, it'd be difficult to fathom why President Trump would order this now when he sort of needs China's cooperation more than ever. But from a legal perspective, we sort of did see this coming. You know, back in April, the U.S. did launch a criminal probe into Huawei's dealings in Iran? And that came after authorities investigated Huawei's Chinese rival, ZTE, over similar violations. And then it banned U.S. chip makers from selling to ZTE. And that ban was later lifted by President Trump after Xi Jinping got involved.

But going back to Huawei and Meng Wanzhou, she also served on the board of a Huawei holding company more than a decade ago that did business in Iran. So the charges might be related to that, too.

GREENE: Well, I mean, so many people are following this potential trade deal, I mean, including the markets around the world, among other things. Could this arrest just, I mean, complicate everything?

SCHMITZ: Yes, it definitely could. You know, it's worth pointing out here that, despite this sort of truce in the trade war, we still have a trade war. These tariffs are still in effect. And we have the next three months for both sides to negotiate that. But by arresting the daughter of one of China's most important companies, the U.S. is taking a risk that China walks away from the table and says, fine, you know, let's scrap negotiations and continue the trade war. And that would not be good for either country.

GREENE: NPR's Rob Schmitz in Shanghai. Rob, thanks.

SCHMITZ: Thank you. Transcript provided by NPR, Copyright NPR.