The Chinese government has vowed there will be consequences after Canada arrested the chief financial officer of Huawei.

The arrest last week of Meng Wanzhou, Huawei’s chief financial officer and deputy chair, has triggered widespread concern in China, and has resulted in the sharp warning from the Chinese foreign ministry.

Wanzhou is also reported to be the daughter of the founder of Huawei, and the arrest was reportedly carried out on behalf of US officials, who are investigating Huawei over possible violation of sanctions against Iran.

Huawei arrest

Huawei’s Wanzhou was arrested on 1 December in Vancouver at the request of the United States.

Wanzhou argued in court last Friday that she should be released on bail while awaiting an extradition hearing, and apparently cited her long-standing ties to Canada, the two properties she owns in Vancouver and fears for her health while incarcerated, Reuters reported.

Meng, 46, reportedly faces US accusations that she misled multinational banks about Huawei’s control of a company operating in Iran.

The company in question is Honh-Kong-based Skycom Tech Co. Ltd, and the US allegation is that Huawei used this firm as an ‘unofficial subsidiary’ to conduct business in Iran.

The firm allegedly sold mobile network equipment to several major telecommunications companies in Iran; as well as selling Hewlett-Packard computer equipment in 2010 to Iran’s largest mobile-phone operator.

This alleged deception apparently put the banks at risk of violating US sanctions and incurring severe penalties, according to court documents seen by Reuters.

American officials allege that Huawei was trying to use the banks to move money out of Iran.

Wanzhou meanwhile is arguing that she should be released on bail as she is not a flight risk, although US officials alleged she has used at least seven passports in 11 years.

Meng said on Friday she was taken to a hospital for treatment for hypertension after being detained.

Chinese reaction

On Saturday, Chinese Vice Foreign Minister Le Yucheng warned the Canadian ambassador there would be severe consequences if it did not immediately release Meng.

Then on Sunday China’s foreign ministry reportedly summoned the US ambassador to lodge a “strong protest” over the arrest, and said the United States should withdraw its arrest warrant.

Le Yucheng told US ambassador Terry Branstad the United States had made an “unreasonable demand” on Canada to detain Meng while she was passing through Vancouver, China’s Foreign Ministry said.

“The actions of the U.S. seriously violated the lawful and legitimate rights of the Chinese citizen, and by their nature were extremely nasty,” Le reportedly told Branstad.

China urged the United States to withdraw the arrest warrant, Le added. “China will respond further depending on US actions,” he said, without elaborating.

Huawei is of course in the middle of a tense situation with Western governments, after intelligence officials have warned against using 5G networking equipment from the Chinese telecoms kit maker.

Some countries, including the UK, Germany, Japan, New Zealand, Australia and the United States have already moved to restrict the use of Huawei kit over these security concerns.

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Tom Jowitt

Tom Jowitt is a leading British tech freelancer and long standing contributor to Silicon UK. He is also a bit of a Lord of the Rings nut...

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