BEIJING -- The arrest of a top executive at one of the most successful Chinese global companies threatens to upend a delicate detente between the U.S. and China in its monthslong trade war.
Meng Wanzhou, deputy chairwoman and chief financial officer of telecommunications giant Huawei, was arrested Saturday during a transit stop at an airport in Vancouver, Canada, and could face possible extradition to the U.S. and an appearance in federal court in New York.
A U.S. law enforcement official, who was not authorized to discuss the case by name, said the case against Meng involves violations of U.S. sanctions against Iran. Another U.S. official described the violations as serious. Neither official provided specifics.
The arrest comes at a sensitive time as Washington and Beijing aim to strike a trade deal before March 1. Now any agreement has to overcome what will undoubtedly be viewed as a provocation in the eyes of China's leadership given Huawei's importance.
"Huawei embodies the existential angst of China hard-liners in the U.S. concerned about China's ostensible grand plan for global domination of new high-tech industries," said Eswar Prasad, a professor of trade policy at Cornell University. "Meanwhile, such actions by U.S. and other governments crystallize fears among Chinese leaders that the real intention is to hold back China's economic progress and transformation."
China demanded the immediate release of Meng, who is among the cream of China's corporate elite. She is the daughter of tech billionaire Ren Zhengfei, Huawei's founder and CEO and a former engineer in the People's Liberation Army.
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Chinese officials said she had not broken any laws, accused the United States and Canada of violating her rights and demanded an explanation as to why she was arrested.
Huawei said in a statement it was unaware of any wrongdoing by Meng.
The arrest "wasn't a shot across the bow, but a shot into the heart of the ship" because Meng was basically considered an official of the Chinese government, a former U.S. official involved in national security matters said on the condition of anonymity.
Other experts said the arrest was merely consistent with U.S. policy.