Note: We do not plan to cover this directly, as there is little we can add to this beyond what many mainstream publications have reported and the broader impact is yet unknown.
However, given Huawei's huge size, the fact that this is Huawei's CEO's daughter, and how angry this may make China, it could eventually have an impact on the industry.
For the China side of this, below are some social media posts from the Chinese government:
Yes, there is little to add by any mainstream publisher
as Ms Meng had sought a ban on the publication of details and this had been ordered by the courts. [Emphasis added.]
BBC: Huawei CFO arrest 'violates human rights', China says
A number of China watchers have speculated that China may or should retaliate by arresting a US executive of an arms manufacturer selling to Taiwan:
The justification would be that selling arms to Taiwan is just as illegal in China as selling to Iran is for the US.
This 2013 Reuters article explains the original claims / link between Huawei, Huawei CEO and Iran:
For decades China has laughed at our laws and done whatever they wanted. They steal technology and lie even when caught red handed.
Now they know the game has changed.
I give China the finger!
Reuters: Chinese state media distance Huawei arrest from U.S. trade talks
That's a positive sign for trade talks but an implicit admission how much China was a resolution, despite the US actions.
Update: China Global Times editor continues to talk up the risks to executives of both countries traveling to the other:
One interesting industry aspect to this: Will this impact Dahua and Hikvision's CEOs willingness to travel to the US? In years past, they regularly did.
Take my husband, please?
Lawyers for indicted Huawei CFO Meng Wanzhou put a new spin on an old Rodney Dangerfield joke on Tuesday when they offered to pledge both of Meng's multimillion dollar homes as well as her husband (and her children) as collateral should the executive be granted bail.
Yes, you read that right:
- HUAWEI CFO'S LAWYER PLEDGES HUSBAND PLUS 4 OTHERS AS SURETIES
Meng's lawyer also agreed that their client would wear an ankle bracelet while free on bail.
Law professor with a detailed analysis of the situation: The Detention of Huawei’s CFO is Legally Justified. Why Doesn’t the U.S. Say So?, key quotes:
The Chinese government threatened both Canada and the U.S. with “grave consequences” if Meng was not immediately released from detention. Its threats have been supported and amplified by Chinese state-run media and on Chinese social media. Boycotts of Apple products and Canada Goose down coats are spreading in China. Most dramatically, a Canadian think-tank scholar and diplomat, Michael Kovrig appears to have been detained in Beijing on murky charges of endangering Chinese state security.
Meng is being charged with bank fraud, rather than violating U.S. sanctions on Iran. It is likely that Meng will be charged by the U.S. with violating the bank fraud statute, 18 U.S.C. § 1344, which criminalizes any attempt “to defraud a financial institution,” or obtain funds from a “financial institution, by means of false or fraudulent pretenses, representations, or promises.” According to reports describing the U.S. affidavit, Meng is alleged to have personally made a presentation to HSBC claiming that a company doing business with Iran was not controlled by Huawei in violation of U.S. sanctions. If Meng knowingly misled HSBC in order to get some financial benefit or support, this would likely violate the statute—a breach that carries a possible 30-year jail sentence or $1 million fine.
It is worth noting that bank fraud prosecutions are not rare in the U.S. The Justice Department’s web page is filled with press releases about numerous bank fraud convictions.
Former Canadian ambassador article: We must finally see China for what it truly is - quote:
We need to understand that China behaves the way it does because it works. This is enabled by a chorus of advisers in the West who don’t seem particularly discomfited by how China treats people at home or abroad. The global consulting firm McKinsey, whose bullish line on China is avidly consumed by our own government, recently held a lavish retreat for its executives in Xinjiang, in China’s far west, ground zero for the country’s repression of its Muslim Uyghurs...
they all connect to a larger narrative that is finally taking hold, one that concedes that China is an increasingly irresponsible power and partner, one that feigns compliance with international norms only when it is convenient to do so.
China's ambassador to Canada with a stern warning for Canadians, in a recent article:
I have recently heard a word repeatedly pronounced by some Canadians: bullying. They said that by arresting two Canadian citizens as retaliation for Canada’s detention of Meng, China was bullying Canada. To those people, China’s self-defence is an offence to Canada. If someone slaps you on your left cheek, give him your right cheek, they told us. But I have never seen them doing as they said.
That's a pretty blunt message. I am curious how Canadians will take such a move.
How did both Jesus and Huff Post get involved here?
A Canadian has been sentenced to death for drug dealing inside of China, widely viewed, even on the Chinese side, as being in retaliation for Huawei's CFO's arrest. Comment from Sinocism:
there can be no doubt Beijing is using the threat of death to a Canadian citizen to interfere in Canada’s internal judicial affairs to try to get the Huawei CFO Meng released…this is so stupid on so many levels by Beijing, but this is how the Party rolls inside China and it sees no reason to act differently outside the PRC borders…
I am not sure these bully tactics are going to work in the West.
Canada and China - who know these two would become so heated.
Latest round - China’s envoy to Canada on Thursday warned Ottawa there would be repercussions if it banned technology firm Huawei Technologies Co Ltd from supplying equipment to Canadian 5G networks, the latest blast in a deepening bilateral dispute...
“If the Canadian government does ban Huawei from participating in the 5G network, then as for what kind of repercussion there will be, I’m not sure, but I believe there will be repercussions,” Lu said through an interpreter, urging Ottawa to “make a wise decision on this issue”.
Update: US to formally seek extradition of Huawei executive Meng Wanzhou: Report
SCMP report follow-up says "China warned on Tuesday that it will take action against the United States and Canada if Washington goes ahead with a demand for the extradition of a senior Huawei executive."
Canada’s ambassador to China John McCallum says Huawei’s Meng Wanzhou has ‘strong case’ against extradition:
One, political involvement by comments from [US President] Donald Trump in her case. Two, there’s an extraterritorial aspect to her case, and three, there’s the issue of Iran sanctions which are involved in her case, and Canada does not sign on to these Iran sanctions. So I think she has some strong arguments that she can make before a judge
This has caused political debate in Canada:
The opposition Tories accused McCallum of possible “political interference” in the case and of discrediting the extradition process.
It’s a setback and an unfortunate setback. It undermines that Canada is playing this by the book
Mulroney said giving advice to a judge is completely inappropriate when the government has been saying that Meng’s extradition is up to judicial authorities.
China government's Global Times: Canada must not extradite Meng Wanzhou:
Canada, being a henchman for the US and abiding by the so-called extradition treaty between the US and Canada, persecutes senior executives of Chinese companies regardless of international law and friendly ties with China. How can Canada be detached from the case if Meng is extradited?
It is expected that if Meng is extradited to the US, Canada will face a severe backlash from China that puts bilateral ties in jeopardy.
US files criminal charges in two Huawei cases, seeks extradition of CFO Meng Wanzhou
From the WSJ's report on indictments, the charges are quite serious:
In one of the newly unsealed indictments, the U.S. alleged Huawei, its finance chief and other employees worked over the years to deceive multiple global banks and the U.S. government about its business in Iran. The superseding indictment, returned last week, charged Huawei and two affiliates with bank fraud, violations of U.S. sanctions and conspiracy to obstruct justice related to the grand jury investigation....
Huawei offered bonuses to employees who were successful in stealing confidential information from other companies, U.S. prosecutors alleged, adding that the alleged conspiracy against T-Mobile wasn’t limited to rogue employees but a companywide endeavor.