Sabrina Meng: The first victim of the US trade war on China

[cs_content][cs_element_section _id=”1″ ][cs_element_layout_row _id=”2″ ][cs_element_layout_column _id=”3″ ][cs_element_text _id=”4″ ][/cs_element_layout_column][/cs_element_layout_row][/cs_element_section][cs_element_section _id=”5″ ][cs_element_layout_row _id=”6″ ][cs_element_layout_column _id=”7″ ][cs_element_line _id=”8″ ][/cs_element_layout_column][/cs_element_layout_row][cs_element_layout_row _id=”9″ ][cs_element_layout_column _id=”10″ ][cs_element_image _id=”11″ ][/cs_element_layout_column][cs_element_layout_column _id=”12″ ][cs_element_headline _id=”13″ ][/cs_element_layout_column][/cs_element_layout_row][/cs_element_section][/cs_content][cs_content_seo]In a few months it will be a two years anniversary of Huawei CFO Sabrina Meng’s arrest. She was
detained by the Canadian authorities in December 1 2018 at Vancouver International Airport
while she was having stopover in on they way to Mexico. Later same month local court released her
on C$10 million (US$7.5 million) bail. Meng is under house arrest and she has to wear a GPS ankle
bracelet, submit to the 24-hour supervision of a private security firm and surrender her two Hong
Kong and Chinese passports. She is still facing possible extradition to the United States on fraud
charges related to alleged breaches of US and EU sanctions on Iran.

Sabrina Meng is not just an executive of Huawei but also the first child of Ren Zhengfei, founder
and CEO of the Huawei. Even though media often portray Huawei as connected to the Chinese
government or even as a state owned enterprise, Huawei is actually a private company. Ren
Zhengfei owns 1.14% share of the holding company that owns Huawei and rest 98.86% are owned
by 96,768 shareholding Huawei employees. By holding Meng US is having an leverage over her
father and so influence over the whole Huawei. This is a nightmare for any family-run company
where both the family and the company are put in danger.

Recently while Ren Zhengfei was showing journalists around his office it was noticed from the
pictures that he had Chinese translation of Frenchman Frederic Pierucci’s book The American Trap
on his desk. If Ren has had time to read the book he probably can’t be without mirroring his
daughters case to that of Pierucci’s. Pierrucci was an executive of French rail transport company and
got arrested for bribery charges as he disembarked from a flight in New York in 2013. Pierucci
pleaded guilty to charges and ended up spending two years years in prison in Pennsylvania and

Rhode Island, and got put on parole for three years. In the book Pierucci claims that the anti-
corruption investigation was motivated by the US attempt to help General Electric acquisite
Alstom’s energy business.

It isn’t uncommon for companies to violate the US sanctions on Iran or other countries, and there
has been several companies that have been indict for this offense. Banks like Deutsche Bank,
Standard Chartered, HSBC, and Royal Bank of Scotland have paid fines for violating sanctions.
The US e-commerce giant Amazon had to pay fines as it had failed to stop people residing in Iran
buying goods and services on the site. So has also Chinese telecommunication company ZTE.
Swedish 5G telecommunication competitor Ericsson end up paying penalty for sanction violation in
Sudan. None of this have led to arrest or extradition of executive to the US.

To Huawei be singled out to get their executive arrested in an foreign country and facing extradition
to the US for simple fraud charges related to alleged breaches of US and EU sanctions points to a
political motive behind the operation. Even the Canadian police that handled the arrest of Sabrina
Meng recognized “the highly political nature of the arrest” in a redacted Dec. 1, 2018 memo.

The US Attorney General William Barr has said that “China has emerged as the United States’ top
geopolitical adversary.” He has also called the US universities, industry, society and its allies to join
together countering threat posed by China. This is not how a country that believes in free markets
acts, rather it reminds of an empire that is afraid of loosing its hegemony. 5G technology is an field
where Huawei is more advanced than its main rivals Ericsson and Nokia, and years ahead of any the
US competitors. This is why Huawei is seen as a major threat to the US. Despite all the measures
taken by the US authorities, Huawei has became the largest smartphone manufacturer, surpassing
both Samsung and Apple.

Donald Trump’s administration has used their influence outside the US to pressure foreign
governments to restrict Huawei’s business. Trump has boasted in a press conference that “We
convinced many countries — many countries — and I did this myself, for the most part — not to
use Huawei because we think it’s an unsafe security risk. It’s a big security risk.” This has led the
UK to ban mobile providers from buying new Huawei 5G equipment after 31 December 2020
Providers must also remove all Huawei’s 5G kit from their networks by 2027. Move that was
estimated by Digital Secretary Oliver Dowden to cost up to £2bn and delay 5G roll-out for “two to
three years”. Same time Korean telecom giant LG Uplus has declared that Huawei’s equipment does
not pose any security risks.

In an interview shortly after the Meng’s arrest in December 2018 when asked if he would intervene
with the Justice Department in her case President Trump said: “If I think it’s good for what will be
certainly the largest trade deal ever made – which is a very important thing – what’s good for
national security – I would certainly intervene if I thought it was necessary.” This implies that
Huawei ‘s technology is not really seen as real national security threat, but just as an bargaining
chip in a trade war against China.

Victim in this political war against Huawei is technology, as citizens are made to understand that
new technology is security risk especially if it comes from a country that the US see as a threat to
itself. Restrictions on Huawei equipment can cause delays globally on 5G roll-out and hinder digital
transformation of our societies and businesses when we most need it. We should detach technology
from the politics so that we can start creating solutions for global problems of our time. Also we
should hope Sabrina Meng to be released as soon as possible. Law should be same for everyone and
not be influenced by politics.

Jari-Pekka Raitamaa

Founder and CEO of China Business Forum[/cs_content_seo]