Huawei has other battles to win in the US: expert

By Leng Shumei and Chen Qingqing Source:Global Times Published: 2018/12/12 23:43:40

Huawei's chief financial officer (CFO) Meng Wanzhou. Photo: VCG

 "I am proud of Huawei and proud of my homeland," Huawei Technologies' Chief Financial Officer Meng Wanzhou said Wednesday in her first public statement after her release from 10 days in  detention in Canada.

Her arrest made headlines around the world and fueled growing tension between China and the US over the latter's long-held national security concerns.

Meng made the remarks on her WeChat account on Wednesday afternoon, Beijing Time. "I'm in Vancouver, and now back with my family … Thanks to everyone who cares about me," Meng said.

Meng was released by a judge in Vancouver after posting bail of C$10 million ($7.5 million) on Tuesday, local time. Her bail included C$7 million cash and a C$3 million surety made up of property from four associates, The Star newspaper in Vancouver reported Tuesday. 

She will return to court on February 6, for a scheduling hearing. She must stay at her Vancouver home from 11 pm to 6 am and wear an electronic ankle monitor while she waits for her extradition to proceed through Canadian courts, according to the report.

Meanwhile, the Beijing State Security Bureau said Tuesday that Michael Kovrig is now under investigation  on suspicion of jeopardizing China's national security.

Kovrig is a senior adviser with International Crisis Group, and a former Canadian diplomat.

China's Foreign Ministry said Kovrig's employer is not a registered NGO in the Chinese mainland and its employees' activities in the mainland would be in violation of Chinese law.

Huawei reiterated in a statement on Wednesday that the company "complies with all applicable laws and regulations in the countries and regions where we operate, including export controls and sanction laws of the UN, US, and EU."

Chinese Foreign Ministry spokesperson Lu Kang stressed at a routine press briefing that China had clearly declared its position on Meng's case to Canada and the US. Some days ago the ministry summoned the countries' ambassadors urging them to release Meng or face "great consequences."

The US has 60 days from the day of Meng's arrest to file a formal extradition request with Canadian authorities. Canada grants around 90 percent of extradition requests, the New York Times reported Tuesday.

Analysts said Huawei, the world's largest supplier of telecom network equipment, won't be greatly affected by Meng's case.

But some Chinese people on social media suggested that if the case drags on, it could ruin Meng's career as Huawei CFO.

US President Donald Trump said on Tuesday in an interview with Reuters that he would intervene with the US Justice Department in Meng's case if it would help secure a trade deal with China.

Liu Weidong, a research fellow at the Chinese Academy of Social Sciences' Institute of American Studies, told the Global Times on Wednesday that it is uncertain how much Trump can do due to the separation of state powers in the US.

"Meng's case should not affect trade negotiations between China and the US and it should not be politicized," Liu said.

"But there is no doubt that the US has had political concerns with Huawei for a long time, even before trade frictions erupted," he noted. 

Meanwhile, the country is considering issuing a new warning to US citizens, including business executives traveling to China, saying that China may retaliate for Meng's arrest, said Reuters citing anonymous sources.

Tough road

Meng's arrest is related to an investigation by US authorities into Huawei for alleged illegal transactions with Iran starting as early as 2016, according to Reuters.

The US has focused its attention on Huawei for quite a long time. Even though Huawei has repeatedly denied it is affiliated with the Chinese government, the US in August prohibited any government agencies to purchase products and equipment from Huawei and ZTE.

A US House of Representatives Intelligence Committee report in October 2012 warned of the Chinese government's "cyber espionage" in the US using Huawei and ZTE products. The report followed an 11-month probe, according to Reuters.

The US has long held that the two companies pose a national security risk, but has never publicly explained the risks or produced evidence that its equipment installed in the US can be manipulated by China.

Although Huawei has been locked out of the US government, a number of smaller US carriers have been seeking cooperation with Huawei.

China's contribution

In spite of rising concerns over security and espionage, Chinese tech companies such as Huawei and ZTE continue to make large contributions to oversea markets by localizing their research and development and promoting greater synergy between devices, networks and platforms.

"The capability of combining those factors…have made Huawei stronger than its foreign rivals Ericsson and Nokia," Xiang Ligang, chief executive of the telecom industry news site, told the Global Times on Wednesday.

Lower costs and fast construction have helped the Chinese company leap ahead of its foreign rivals, helping Huawei gain a reputation in foreign markets including the UK and Germany.

"Huawei has been increasing its revenue for the last 10 years in this [mobile network] market. They also have the most mature 5G technology and the most active deployment of 5G bases," Kevin Curran, a professor at Ulster University, told the Global Times on December 5.

Although some foreign telecoms in the UK and New Zealand have been forced by political pressure to drop plans to use Chinese-made equipment in their 5G infrastructure, some have recognized Huawei's contribution to local industry.

"They [Huawei] have provided RAN equipment for Spark's 4G network since 2013, during which time they have been a good supplier to Spark," Andrew Pirie, head of corporate relations at New Zealand's major carrier Spark, told the Global Times in a recent interview.

"Huawei has also been involved with Spark's 5G Lab that was launched recently," he said.

Also, Britain's BT chief architect Neil McRae recently said there is only one true 5G supplier right now and that is Huawei and the others need to catch up, although the carrier has recently pulled the Chinese company from its core mobile networks, media reported.

Newspaper headline: Free at last, Meng gets bail

Posted in: DIPLOMACY

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