Huawei CFO arrested in Canada, extradition to U.S. imminent

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The FTSE 100 was called 71 points lower

The detention of Huawei chief financial officer Meng Wanzhou (孟晚舟) came after United States authorities reportedly launched an investigation into suspected Iran sanctions breaches by Huawei, which was already under scrutiny by USA intelligence officials who deemed the company a national security threat.

The global chief financial officer of Chinese phone firm Huawei is facing extradition to the USA after being arrested in Canada. "Huawei is not aware of any misconduct by Ms. Meng", said Huawei's CEO in a statement posted to WeChat, China's most popular communications app.

The Wall Street Journal reported in April that American authorities are investigating whether the Chinese tech company violated sanctions on Iran. A ministry spokesman, Gao Feng, said China will promptly carry out their agreement and is confident they can reach a trade deal during the 90 days set by Trump to suspend USA tariff hikes.

The Huawei executive, Meng Wanzhou, was detained by Canadian authorities in Vancouver as she was changing flights Saturday - the same day that Trump and Xi met at the Group of 20 summit in Argentina and produced a cease-fire in their trade war.

In June 2014, Chinese businessman Su Bin was picked up on a US warrant in Canada, where he had been attempting to establish residency.

But casting Huawei as the Chinese equivalent of Apple understates its reach and importance - Huawei also manufacturers a tremendous amount of the equipment used by phone and internet companies, as well as providing IT consulting services both in China and around the globe.

Meanwhile, the Canadian president Justin Trudeau declined to give more details on the swoop, in light of Meng's bail hearing on Friday, other than to say there was no political involvement. "The company believes the Canadian and USA legal systems will ultimately reach a just conclusion". The company says it abides by all laws and rules where it operates.

The main index in Hong Kong fell about 2.5% and Tokyo stocks closed down 1.9% on Thursday after Canada said Huawei's chief financial officer, Meng Wanzhou, had been arrested in Vancouver and is being sought for extradition by the U.S. government.

Chinese Commerce Ministry spokesman Gao Feng said China is confident it can reach a deal during the 90 days that Trump agreed to suspend a scheduled increase in US import taxes on $200 billion worth of Chinese products. Under Trump and his predecessor, former President Barack Obama, Washington has pressured European countries and other allies to limit their business with Huawei, alleging the company's technology aids China's spy operations.

The bond market "has reignited the debate about what, if anything, the yield curve tells us about the prospects for the U.S. economy and the stock market", noted Oliver Jones, markets economist at Capital Economics, in a research note.

Chinese telecoms giant Huawei Technologies Co Ltd's chief financial officer was arrested as part of a USA investigation of an alleged scheme to use the global banking system to evade US sanctions against Iran, according to sources familiar with the probe.

U.S. lawmakers have repeatedly accused the company of being a threat to United States national security, arguing that its technology could be used for spying by the Chinese government.

Huawei said it was unaware of any wrongdoing by Meng and was provided "very little information" about the charges.

Security concerns recently led BT to bar Huawei equipment from the heart of the 5G network it is rolling out in the UK.

Earlier this year, it barred United States companies from exporting to ZTE, effectively shutting down the firm. A 2012 report by the House Intelligence Committee report urged US businesses to avoid their products and called for blocking all mergers or acquisitions involving them.

Trump has "pulled out all the stops" to hamper Chinese ambitions to challenge the United States as a technology leader, Lam said.

"That's something we should be watching out for. It's a possibility. China plays rough", Mulroney told The Associated Press.

The Huawei executive's arrest comes at a critical time for US-China relations.

As a result, some of the closest allies of the US, such as the U.K., Australia and New Zealand have banned or restricted Huawei on its 5G networks.

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