Meng Wanzhou has found herself cast in the role of geo-political pawn. At least this is the view from China. The latter is the Chief Financial Officer (CFO) and daughter of the founder of the country’s telecoms giant, Huawei. She was recently arrested in Canada, at the behest of Washington, and now faces extradition to the US on charges of violating sanctions on Iran; dating back a decade. If found guilty, a 30-year prison term is on the cards.
All of which raises questions about the fragile 90-day tariff truce agreed upon by both China and the US during last weekend’s G20 summit. Pundits tend to agree that this will continue as planned. That being said, the fact that news of Ms Wanzhou’s arrest was not made public until the deal was done has been seen by certain quarters as evidence of American conniving. Even while US National Security Advisor John Bolton insists that he did not brief President Trump about this important development ahead of the bilateral meeting with Jinping Xi. Whether or not someone else did is open to speculation. Yet what is known is that the fallout is President Xi risking losing face back home. Not least because the tariff deal was to Washington’s advantage.
Some analysts support the Chinese view from behind-the-scenes that the entire incident has little to do with allegations of technology sales to Tehran. Indeed, Bolton himself lent credence to these claims when he talked of Beijing’s penchant for stealing intellectual property. Which is another way of saying of saying that China insists that US companies investing in the country transfer technology. None of which sounds unreasonable given that a disproportionate bulk of profits remains with the foreign entity. There is also the question as to whether any individual country can, with good conscience, claim outright ownership of intellectual property. After all, that is where the use of patents comes in; ensuring that those who behind certain advances are not out of pocket and can continue further research. While upholding commitments to the spread of information and technical know-how.
In this case, the Chinese see the Wanzhou arrest as politically motivated: a direct attack on their increasing global technological outreach. Huawei is, after all, the world’s biggest producer of telecoms equipment; operating in more than 170 countries and regions. More significantly, this year it managed to knock US company Apple from the number two spot in the list of the world’s largest smart smartphone makers. Thus the fate of the 90-day tariff truce is anybody’s guess. For while the deal may well prevail — it was supposed to afford each side the necessary breathing space to negotiate a long-term agreement — what happens next is now very much up in the air.
Nevertheless, one pressing question remains: why did the US choose to go for arrest as opposed to letting the World Trade Organisation (WTO) get on with the job of probing the issue of intellectual property theft; as it had pledged it would? One answer is that Washington is not as interested in trade dispute resolution as it is in disabling its largest competitor in the field of technology. And now the onus is on the Trump administration to prove otherwise. *
Published in Daily Times, December 9th 2018.