Right around the time Trump was having dinner with Xi on December 1, we learnt overnight that Huawei CFO Wanzhou Meng, was arrested in Vancouver and faces extradition to the US, as the DOJ investigates whether Huawei sold gear to Iran despite sanctions on exports. China´s embassy in Canada states:
At the request of the US side, the Canadian side arrested a Chinese citizen not violating any American or Canadian law. The Chinese side firmly opposes and strongly protests over such kind of actions which seriously harmed the human rights of the victim. The Chinese side has lodged stern representations with the US and Canadian side, and urged them to immediately correct the wrongdoing and restore the personal freedom of Ms. Meng Wanzhou. We will closely follow the development of the issue and take all measures to resolutely protect the legitimate rights and interests of Chinese citizens.
We outlined yesterday, when the US markets were closed, credit space continues exploding, causing further erratic equity moves. US indices are still stuck in a range, but the Tru(c)e collapse surely isn´t helped by the Huawei news.
The arrest of the CFO will be a huge negative as this is an attack on China´s by far most global tech company. Bloomberg notes;
“Tencent and Alibaba may be domestic champions and huge platforms in of their own rights, but Huawei has become a global powerhouse,” said Neil Campling, an analyst at Mirabaud Securities Ltd. It is “5G standards that are at the heart of the wider IP debate and why the U.S. and her allies are now doing everything they can to cut to the heart of the Chinese technology IP revolution.”
The below chart needs little commenting. Huawei is a global technology powerhouse.
Who is Ms Meng Wanzhou?
She is the CFO of Huawei, an accountant and a mother, but she is above all the daughter of the ex-army officer, Ren Zhengfei, the founder of Huawei.
Huawei was started in 1987 by Mr Ren. Ms Meng, holds a master´s in management, started at the company in 1993 as a receptionist and was at the time of the arrest the company´s deputy chair. Huawei overtook Apple in sales in the second quarter of this year, the company expects to sell some 200 million smartphones in 2018 and it employs some 180 000 people.
Huawei´s comment on the arrest;
Source: charts by Bloomberg