Caught in the cross-fire between US and China, Huawei responds to CFO’s arrest

Following the arrest of Meng Wanzhou, CFO and deputy chairwoman of Chinese telecommunications giant Huawei, the company said US pressure on a commercial company goes “against the spirit of free economy and fair competition,” adding that its relationship with its partners would not change.

Huawei made the comment in an open letter (in Chinese) to suppliers on Thursday night (Dec. 6).

“Despite the US government being unreasonable, we will not change the relationship with our global supply chain partners,” the company said. However, the shares of Huawei’s major suppliers plummeted on Thursday over the uncertainty of the case.

Meng was arrested on suspicion of Huawei violating export and sanction laws by shipping US products to Iran. She is now facing extradition to the US after her arrest in Vancouver and is set to appear in court today (Dec. 7) for a bail hearing.

Her arrest sparked outrage in China, not only because she is the daughter of Huawei’s founder, Ren Zhengfei, but also because she’s seen as Ren’s successor.

On the day of the arrest, the Chinese Embassy issued a statement urging the Canadian government to “immediately correct the wrongdoing.”

The Shenzhen municipal government also posted on its official Weibo account that it “strongly demanded” the immediate release of Meng, affirming that it will assist Shenzhen-based companies in protecting their rights and interests at home and overseas.

The company said it received very little information regarding the charges and that it is not aware of any wrongdoing on her part. However, according to Bloomberg, consulting firm Exiger, which was enlisted by the Justice Department to monitor HSBC’s compliance efforts, has flagged suspicious transactions linking Huawei Technologies with Iran.

The timing of Meng’s arrest sparked public interest because it took place on the same day as US President Donald Trump and Chinese President Xi Jinping sat down at the G20 to work on a cease-fire in the ongoing trade war.

The US has been leading a campaign against the Chinese tech giant. American authorities have urged their allies, including Canada, to block Huawei from supplying core 5G equipment, fearing the company’s close ties to the Chinese government would make their network equipment vulnerable to surveillance and interference. The US’s allies, including Australia and New Zealand, have decided to ban Huawei 5G equipment.

Earlier this week, British telecommunications company BT announced it is stripping the company’s equipment from its 3G and 4G networks, and the Chinese firm would not be involved in the development of its 5G network.

In April, the US slapped a seven-year sales ban on ZTE, a smaller rival of Huawei, which stopped US firms from supplying chips and components to the Chinese firm. ZTE was forced to halt some of its major business operations.

The trade ban was lifted in July after ZTE was forced to pay a fine amounting to $1 billion and put another $400 million in escrow for as long as 10 years. Around the same time, the Justice Department began investigating Huawei for possible violation of Iran sanctions.

The other daughter of Ren, Annabel Yao, has also been under the spotlight—for a completely different reason, though. Yao, now a student at Harvard studying computer science, recently attended the Le Bal des Debutantes (the Crillon Ball) in Paris.