U.S. move to end Huawei saga should help China ties – but at a price

The United States has responded to one of China’s main demands for better relations with the release of a top executive from Huawei Technologies Co., paving the way for better relations at the cost of appearing to reward Beijing for what critics have called “hostage diplomacy”.

Huawei chief financial officer Meng Wanzhou flew to China from Vancouver after reaching a deferred prosecution agreement with U.S. officials to resolve criminal charges related to U.S. sanctions against Iran. Soon after, China released two Canadian citizens – Michael Kovrig and Michael Spavor – who were detained days after Meng’s arrest in December 2018.

The deal comes two weeks after US President Joe Biden called on Chinese leader Xi Jinping, frustrated by Beijing’s decision to tie progress on climate change to other demands, including Meng’s release as well as lifting sanctions and the abolition of punitive tariffs. China had insisted that the United States take the first step in improving relations, with Foreign Minister Wang Yi saying earlier this month that America “should meet China halfway.”

The deal reached on Friday appears to do just that, amounting to the biggest US step in years to smooth relations with Beijing after a series of punitive measures backed by bipartisan backing in Washington. Although a series of issues remain between the world’s largest economies, one of the biggest obstacles to greater cooperation has now disappeared.

“This is a very important decision and symbolizes a new beginning for China and the United States,” said Henry Wang Huiyao, chairman and founder of the policy research group at the Center for China & Globalization in Beijing. . “Then there could certainly be cooperation on climate change. And tariffs, he said.

Meng’s arrest in December 2018, the same day Xi met with US President Donald Trump on the sidelines of a Group of 20 summit, rocked elite circles in Beijing. She is the daughter of the founder of Huawei, a national champion at the forefront of Xi’s efforts to make China self-sufficient in strategic technologies.

China treated the arrest as a national affront, quickly detaining two Canadian citizens on unspecified national security charges and attacking the government in Ottawa.

Former diplomat Michael Kovrig, his wife Vina Nadjibulla and his sister Ariana Botha after Kovrig returned to Toronto on Saturday | REUTERS

Authorities in Beijing have repeatedly called Meng’s case “political” while insisting that Canadian detentions respect the rule of law – while Chinese diplomats have suggested the couple would be used as bargaining chips to obtain his release. The clash cost billions of dollars in lost trade and plunged China-Canada bilateral relations to their worst level in decades.

China reiterated its position on the issue on Saturday, saying Meng’s arrest was political persecution against Chinese citizens with the aim of suppressing Chinese high-tech companies. The allegations of fraud against Meng are purely fabricated, state broadcaster CCTV said, citing Foreign Ministry spokeswoman Hua Chunying.

US prosecutors said Meng’s deal shows that she “took responsibility for her lead role in the commission of a scheme to defraud a global financial institution.” Biden’s Justice Department statement also noted that extradition proceedings in Canada could have persisted for months or years.

“There are signs that the two sides do not want to escalate any further, but they are also unlikely to defuse,” said Shi Yinhong, professor of international relations at Renmin University in Beijing who advised the Council on Chinese state. “Both sides are trying to freeze the level of tensions, and this will go on for quite a long time.”

For China, beyond the insult of arresting such a high-profile figure, the case was also glaring as it showed how the United States could unilaterally impose sanctions on an adversary and then prevent other countries from leading. normal business operations. Beijing has sought to further push back U.S. sanctions against Chinese officials, this year passing legislation that could force companies to choose sides if implemented.

Meng’s deal was presented by US prosecutors as an admission of guilt. US Secretary of State Antony Blinken avoided commenting on Meng while welcoming China’s decision to send Canadians home after more than two years of “arbitrary detention.”

Huawei executive Meng Wanzhou welcomes her arrival in Shenzhen on Saturday.  |  CCTV / VIA AFP-JIJI
Huawei executive Meng Wanzhou welcomes her arrival in Shenzhen on Saturday. | CCTV / VIA AFP-JIJI

Bill Hagerty, a Republican US senator from Tennessee and former ambassador to Japan, accused Biden of “appeasement” to China’s “hostage diplomacy”.

The delicate issues raised by the deal were raised by Canadian Prime Minister Justin Trudeau, who told reporters there would be “time for reflection and analysis in the days and weeks to come” while welcoming his compatriots to his home early Saturday morning in Calgary.

China has long dismissed the label of “hostage diplomacy” as “completely unfounded,” saying no one who obeys the country’s laws should fear being arrested. But Beijing’s broad definition of national security on the mainland and now in Hong Kong increases the risks for foreign companies.

Cheng Lei, an Australian citizen who worked for a Chinese media outlet, has been detained since August 2020 on national security grounds. Haze Fan, a Bloomberg News employee who is a Chinese citizen, was arrested on suspicion of endangering national security last December.

For now at least, business groups are welcoming the resolution of the diplomatic feud – even if they note the lasting damage.

“Canadian and Chinese business leaders are both going to come away from this experience with a lot more trepidation or trepidation than ever before,” said Noah Fraser, CEO of the Canada China Business Council. “But it was a necessary first step. along a path to rebuild that trust.

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