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Dow plunges 700 points after arrest of Chinese tech exec

The Chinese Embassy in Canada has issued a statement over the arrest of Meng Wanzhou The Chinese Embassy in Canada has issued a statement over the arrest of Meng Wanzhou
Ginger Lawrence | 06 December, 2018, 21:45

"We are closely watching the developments in Asia after reports that Canada has arrested the Huawei CFO facing USA extradition for allegedly violating Iran sanctions".

Meng, one of the vice chairs on the company's board and the daughter of company founder Ren Zhengfei, was arrested on December 1 at the request of USA authorities and a court hearing has been set for Friday, a Canadian Justice Department spokesman said.

As there is a publication ban in effect, which was requested by Meng, the department declined to provide any further detail of the extradition. Huawei says the USA requested Meng's arrest and it is unaware of any wrongdoing. Huawei issued a statement saying Meng was changing flights in Canada when she was detained "on behalf of the United States of America" to face "unspecified charges" in NY.

The Wall Street Journal reported in April that American authorities are investigating whether the Chinese tech company violated sanctions on Iran.

But news of Ms Meng's detention spooked sentiment on Thursday.

The arrest and any potential sanctions on the world's second biggest smartphone maker could have major repercussions on the global technology supply chain.

David Mulroney, a former Canadian ambassador to China, said US and Canadian business executives could face reprisals in China.

The arrest, understood to have happened on December 1, is related to alleged violations of USA sanctions, according to reports. Chinese technology has been a particular bugbear for the USA president, who has justified imposing tariffs on Chinese imports with allegations of intellectual property theft by Chinese companies.

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"If I was an American tech executive, I wouldn't travel to China this week", warned Lewis, who labeled Huawei "one of the Chinese government's pet companies" and charged the communist country's leaders wouldn't be afraid to "take hostages".

China is demanding that Canada release a Huawei Technologies executive arrested for possible extradition to the United States. The company has been accused of using its devices to pass on information to the Chinese government, prompting the US Department of Defense to ban their sale on military bases.

Huawei derives around half of its revenue from supplying equipment to telecoms carriers around the world.

Britain's BT said on Wednesday it was removing Huawei's equipment from the core of its existing 3G and 4G mobile operations. ZTE Corp., another Chinese technology company, almost collapsed due to US penalties for violating Iran sanctions before Trump rescued it following a request from Xi.

An editorial in the pro-government Global Times accused the USA of "maliciously finding fault" with Huawei.

The Chinese government has demanded that Meng be released.

In a response, ZTE denied the charges while Huawei insisted it "posed no greater cybersecurity risk than any ICT [Information and Communications Technology] vendor".

Founded in 1987 by Ren Zhengfei, a former People's Liberation Army engineer, Huawei has always enjoyed favorable treatment from a government that - like the USA - remains wary of employing too much foreign technology for vital communications.