Trade war, day 166: China admits it has Canadian hostages

Domestic News

The SCMP notes that “any direct mention of the specific challenges China faced, above all a slowing economy and a tit-for-tat trade war with the US” was “missing” from Xi Jinping’s big speech marking 40 years of reform and opening up. If anything, however, the insistence on Party-led guidance of the economy (and “all tasks”) has slightly dimmed the outlook for the 90 days of trade negotiations.

Also missing was any mention of the ongoing Canada-China hostage situation (latest updates on Access yesterday), which Donald Trump connected to the trade war on December 11. Donald Clarke, an expert in Chinese law, writes in the Washington Post that China has been even more explicit in signaling that the Canadians it has arrested are effectively hostages, to be used as political bargaining chips in the U.S.-China trade and technology conflict:

To call this is a hostage-taking and not a regular criminal investigation is a serious charge. Here it is justified. The critical element of a hostage-taking is that the hostage-taker must tell you that it’s a hostage-taking and what his demands are, otherwise the whole point of taking hostages is defeated. In this case, official and quasi-official Chinese sources have been clear. The Chinese ambassador to Canada has not just admitted it; he has also proclaimed it in an op-ed in the Globe and Mail, saying that those who object to the Kovrig detention should reflect on Canada’s actions. Obviously, if there were no connection, those who object should no more reflect on Canada’s actions than they should reflect on the actions of, say, Saudi Arabia.

That op-ed, published on December 13, beyond politicizing the detentions of Canadians, also called the arrest of Meng “a premeditated political action in which the United States wields its regime power to witch-hunt a Chinese high-tech company out of political consideration.” The Chinese ambassador adds, “The Canadian side detained Ms. Meng in an unreasonable way given she has not received any charges according to Canadian laws.”

  • The Canadian foreign ministry pushed back, saying that even though Meng didn’t break Canadian laws, it couldn’t disobey an extradition request from its treaty partner, the U.S.: “I think people need to be very careful when they start to suggest that corners be cut when it comes to the rule of law and when it comes to international treaty obligations,” Foreign Affairs Minister Chrystia Freeland said.
  • The hostage crisis is making executives “skittish” about traveling to China from the U.S. or Canada, NPR reports.

While the charges against Huawei CFO Mèng Wǎnzhōu 孟晚舟 are purely about her alleged violations of American sanctions on Iran, her arrest does occur in the broader context of a push-and-pull between the U.S. government and Huawei. The latest news shows Huawei on the offensive:

  • “If you have proof or evidence, it should be made known” is what Ken Hu, chairman of Huawei, had to say about allegations of security risk or spying from the company’s technology. “We have never accepted requests from any government to damage the networks or business of any of our customers,” Hu added.
  • Huawei “is relying on a team of recently hired American lawyers, who have filed legal ripostes to U.S. agencies, to defend itself from an onslaught of accusations and restrictions emanating from Washington,” the Wall Street Journal reports (paywall).
  • The company also “said it would spend $2 billion over the next 5 years to focus on cybersecurity by adding more people and upgrading lab facilities, as it battles global concerns about risks associated with its network gear,” according to Reuters.
  • But the Czech government is the latest to air concerns about Huawei, for the exact same reason as cited by American officials: “China’s laws … require private companies residing in China to cooperate with intelligence services, therefore introducing them into the key state systems might present a threat,” said Dusan Navratil, director of the Czech National Cyber and Information Security Agency.

In China, citizens continue to rally to Huawei’s side. A recently-translated essay published on SupChina shows a common Chinese point of view defending Huawei. Other manifestations of support: In Beijing, a bar was seen by Caixin reporter Tanner Brown offering a 20 percent discount to patrons with Huawei phones, and in Henan Province, a park “said it would waive the $9.40 (65 yuan) ticket fee for anyone carrying a Huawei phone,” the BBC says.

Other news in the U.S.-China trade and tech conflict:

Previously in SupChina’s trade war coverage:

Trade war, day 161: Are U.S.-China relations beyond repair?