Shares plunge over Huawei arrest trade war concerns

Shares plunge over Huawei arrest trade war concerns

Earlier this year, the United States almost drove Huawei's biggest Chinese rival, ZTE Corp, out of business for selling equipment to North Korea and Iran in violation of USA sanctions. Huawei is the largest telecommunication equipment company and the world's second largest smartphone maker behind Samsung.

The broad-based S&P slid 2.0 percent to 2,645.74, while the tech-heavy Nasdaq Composite Index shed 2.4 percent to 6,998.19.

Shanghai's market slid about 1.7%, while U.S. stock futures were pointing down more than 1%. Investors stampeded for the safety of government debt, pushing the yield on the USA 10-year Treasury note back below 2.9 percent to its lowest level in three months.

Earlier this year, six top United States intelligence chiefs voiced their concerns about Huawei phones to the Senate Intelligence Committee, with FBI Director Christopher Wray saying he was "deeply concerned about the risks of allowing any company or entity that is beholden to foreign governments that don't share our values to gain positions of power inside our telecommunications networks".

In the view of the United States and many outside analysts, China has embarked on an aggressive drive to overtake America's dominance in technology and global economic leadership. He noted that there has been much concern about the suspicion that Chinese firms like Huawei use stolen USA intellectual property.

Huawei said in a statement that it had been provided with little information "about the charges" against Meng, who is also one of the vice chairs of its board and the daughter of founder Ren Zhengfei from his first marriage. Trump and Xi had dined in Argentina on December 1 at the G20 summit.

Due to its massive manufacturing industry, and increasing expertise in electrical technology, China imports millions of tons of refined metals every year.

Huawei chief financial officer Wanzhou Meng's family appears to have connections to at least two pricey Vancouver homes including one in the exclusive Shaughnessy neighbourhood, property records show.

Her arrest drew a quick reaction in Washington.

On Thursday, China's Ministry of Foreign Affairs Geng Shuang responded to news of her arrest, demanding clarification regarding the reason for her arrest, as well as her immediate release.

The Chinese Embassy in Ottawa said her human rights were violated and demanded she be freed. News of Meng's arrest provoked an immediate protest from the Chinese embassy in Canada, demanding the US and its neighbor "rectify wrongdoings" and free Meng.

In April, the sources told Reuters the U.S. Justice Department probe was being handled by the U.S. attorney's office in Brooklyn.

Following news of the event, which didn't break until Wednesday, speculation swirled as to whether the United States or Chinese presidents knew of the law enforcement action. A spokesman for the USA attorney's office in Brooklyn also declined to comment.

Huawei's relationship with the United States has always been rocky. "They will retaliate and China will take hostages", he said.

This time, the focus of the friction is on Meng Wanzhou, scion of a Chinese telecommunications giant.

Thus far, China has demanded that Canada and the US drop the case and release Meng immediately, accusing the North American nations of harming her human rights.

"The United States is stepping up containment of China in all respects", said Zhu Feng, an global relations expert at Nanjing University.

The long-standing U.S. -Canada treaty requires the offence for which extradition is sought to be a crime in both countries. "The company believes the Canadian and US legal systems will ultimately reach a just conclusion", the statement continued.

However, the topic ranked only 31st among trending items on Weibo as of Thursday afternoon, with many discussion threads apparently blocked, which is not unusual on China's heavily censored Internet.

"This reminds the Chinese, and ourselves, that we are part of an worldwide order backed by the U.S". "China tension around geopolitics and techno-nationalism", he said of Meng's arrest. -China relations, it was not clear if the timing was coincidental.

Most countries, even close US allies such as Canada, Britain and Germany, have not made any moves against Huawei, arguing they have sufficient procedures to test equipment for security.