China slams US for using national power to tarnish Chinese companies

By Yang Sheng and Chen Qingqing Source:Global Times Published: 2019/1/29 22:18:41

Legal battle to have 'limited impact'

A woman uses her smartphone while walking past a sign outside a Huawei store in Beijing on Monday. Asian markets fell as charges against Chinese tech giant Huawei in the US cast a shadow over upcoming trade talks, while investors were also tracking a Wall Street sell-off. Photo: AFP

China on Tuesday urged the US to stop its unjustifiable crackdown on Huawei and urged Canada to immediately drop the arrest warrant for Huawei CFO Meng Wanzhou after the US Justice Department formally filed criminal charges against the Chinese company and Meng on Monday and sent the extradition request to Canada for Meng.

The timing of the filing coincides with upcoming high-level trade talks between the two countries, which are scheduled to take place on Wednesday and Thursday in Washington DC. US actions create uncertainty that the two sides can strike a deal to end the ongoing trade war. 

Chinese Foreign Ministry spokesperson Geng Shuang said at Tuesday's routine press conference that China is highly concerned about the US' charges against Huawei and Meng. 

"For some time, the US has been using its national power to tarnish and crack down on specific Chinese companies in an attempt to strangle their lawful and legitimate operations. Behind such practices are deep political intentions and manipulations," Geng noted.  

Regarding the US request to Canada, China has made solemn representations to the US and Canada. China expressed strong dissatisfaction and resolute opposition to the US' disregard of China's solemn representation and its insistence on making extradition requests to Canada, Geng said. "We once again urge the US to immediately withdraw the arrest warrant and formal extradition request for Ms Meng Wanzhou," Geng said.

The US government has officially sent Canada an extradition request for Meng. Canada's Department of Justice confirmed Monday, the Canadian media Global News reported.

The US Justice Department on Monday also accused Huawei of stealing trade secrets, obstructing justice and engaging in bank fraud by evading economic sanctions on Iran. 

"On Meng's case, China has made clear its stern position many times. The US and Canada abused their bilateral extradition agreement and took compulsory measures against a Chinese citizen for no reason. Such actions seriously violate the legitimate rights and interests of the Chinese citizen," Geng noted. 

Chinese experts said the US is nervous and desperate as it attempts to crack down on a rising competitor that has made great achievements in science and technology. 

They warned that China needs to prepare for a "long legal battle" to deal with continued unwarranted persecution and unreasonable attempts by the US.

"Using judicial tools for political purposes is not a new tactic in US diplomacy when it desperately wants to crack down on its rival," said Diao Daming, a US studies expert at Renmin University of China in Beijing.

"The Chinese government and Huawei need to expose the truth about US tricks to the world. The US is obviously getting nervous over the achievements Chinese firms have made in sci-tech," Diao said.

Huawei Technologies said it is disappointed to learn of the criminal charges the US officially announced and denied that it or its subsidiaries and affiliates have committed any of the asserted violations. 

"The company sought an opportunity to discuss the investigation by Eastern District of New York with the Justice Department, but the request was rejected without explanation," Huawei said in a statement sent to the Global Times on Tuesday.  

The statement also showed that it is not aware of any wrongdoing by its CFO Meng, and Huawei believes the US courts will ultimately reach the same conclusion.

'Don't be used'

"We also urge Canada to take China's solemn position seriously, immediately release Meng and ensure her lawful and legitimate rights and interests, and stop risking its own interests for the benefit of the US," Geng said.

There are two possible consequences for Canada, said Li Haidong, a professor at the Beijing-based China Foreign Affairs University. 

"First, pushing the judicial process objectively without political influence from the US, and Meng, under this circumstance, would very likely appeal successfully and get released; second, accepting the political manipulation from the US and proceed with the extradition, and under this circumstance, China-Canada relations would be much worse than at present and Canada would surely receive a harsher retaliation."

If Canada is truly judicially independent, it can just push the judicial process, and ignore the political manipulation behind the case, because it is not hard to realize that the case does not apply to the extradition treaty. Meng would be released and China-Canada ties could immediately be repaired, Li noted. 

"Canada doesn't need to worry about the US, because the US would only blame its own agencies or departments who failed to provide concrete evidence and get humiliated rather than Canada, if the Canadian court makes an impartial judgment," Li said.

Former ambassador to China John McCallum also expressed his analysis that Meng has a very strong case in court against a US extradition, but he was fired by Prime Minister Justin Trudeau under pressure from conservative political forces. 

Herb Dhaliwal, a former minister who served with McCallum in the Chrétien government, said the firing of McCallum and the arrest of Meng have set back Canada's relations with China that Jean Chrétien had cultivated.

Asked if the case will affect China's 5G development, Wen said the country will steadily deploy the next generation of wireless technologies and continue working with global partners.

Long legal battle

It's time for Huawei to fight US accusations in court, Fu Liang, a Beijing-based telecom industry expert, told the Global Times on Tuesday.

"Huawei said it has been operating in strict compliance with applicable laws, so the legal battle may not be what the US expects. One thing's for sure, Huawei is not ZTE," Fu said.

The analyst noted that as a global company, Huawei has done better in complying with the law compared with ZTE. ZTE, which is one of the world's top telecoms equipment vendors, struggled last year after the US Department of Commerce activated a denial order in April against the Chinese company. 

ZTE reached a settlement with the US in June, under which it agreed to pay a $1 billion penalty, put $400 million in an escrow account, and replace its entire senior management team in exchange for the lifting of the US ban.

"It will be a long battle for Huawei, but the case will have limited impact on the company, as it is not run only by Meng. They will act and respond to these charges through legal procedures," said Xiang Ligang, chief executive of telecom industry news site 

The longstanding US-Canada extradition treaty requires that an offense for which extradition is sought to be a crime in both countries, also known as the principle of double criminality, Long Z. Liu, an attorney licensed in California, told the Global Times, suggesting that Meng's alleged conduct is not a crime in Canada, and, as such, the requirement for extradition cannot be met.  

The US Justice Department also announced charges Monday against Huawei for allegedly stealing trade secrets from T-Mobile. The charges stem from a civil trade secrets lawsuit filed by T-Mobile in 2014 over a robot called "Tappy," which was used in testing smartphones, CNBC reported. The timing was too coincidental, hence, could be political, Liu said. 

The jury in Seattle said in 2017 that Huawei should pay $4.8 million to T-Mobile because the Chinese company had breached a supply contract with the US carrier, but it did not award any damages from the trade secret claim. 

"The case was decided years ago, which has now been elevated in the justice department's indictment files, which was an abnormal move," Liu said. 

The US Justice Department unsealed two indictments on Monday against Huawei. One, sent out by the Western District of Washington in Seattle, said Huawei allegedly got into T-Mobile's secrets, and the other accused Huawei of skirting US sanctions on Iran. 

The charges are merely allegations, and the defendants are presumed innocent until proven guilty in a court of law, Liu noted.

Newspaper headline: China slams US charges

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