China Detains 2 Canadians as Canada Maintains Rule of Law in Huawei CFO Arrest

Situation may mark an inflection point in North American diplomatic relations with China

NEWS ANALYSIS

OTTAWA—The arrest and detention of Huawei CFO Meng Wanzhou has again affirmed China’s disrespect for the rule of law and given new grounds for cooperation between Canada and the United States. Canada now has to deal with a second national detained in China on the heels of Meng’s arrest, which could escalate the diplomatic malaise.

On Dec. 10, former Canadian diplomat Michael Kovrig was the first to be detained in China. The second Canadian detained by Beijing is businessman Michael Spavor. Canada’s foreign ministry confirmed he was based in the northern Chinese city of Dandong and works on cultural exchanges with North Korea.

Chinese media say both Kovrig and Spavor have been arrested on national security grounds.

Huawei is one of the Chinese Communist Party’s darlings and a source of national pride as the world’s largest supplier of telecommunications equipment.

Beijing reacted with outrage, demanded Meng’s immediate release, and threatened severe consequences. The regime expressed concern for her human rights, despite the fact that it has shown little regard for the human rights of millions that it imprisons on questionable grounds, as well as Canadian citizens currently detained in China, such as Sun Qian, a Falun Dafa adherent who was arrested against China’s own law because of her belief.

Meng isn’t just some non-descript Chinese citizen. She’s the daughter of the company’s billionaire founder Ren Zhengfei, a former military officer in the People’s Liberation Army.

Canada’s Foreign Affairs Minister Chrystia Freeland said that Meng’s arrest wasn’t politically motivated, echoing what Prime Minister Justin Trudeau previously said. She stressed that Canada’s justice system is independent from the political system.

“Canada is a rule of law country,” she said during a fireside chat at the Toronto Global Forum on Dec. 10. “That is absolutely fundamental to how we run our economy, to how we run our democracy, to how we run our relations with other countries.”

Meng was granted bail for $10 million on Dec. 11 after her Dec. 1 arrest when transferring flights in Vancouver. An extradition process that could last months or years is now underway.

While the case threatens to spill over into the political arena, Freeland told the media in Ottawa on Dec. 12 that the extradition request is about ensuring justice is done and respecting the rule of law.

“I think one of the reasons that Canadians have confidence in our relationship is that the U.S. has a very strong, highly respected legal system,” Freeland said.

Another Strike

The arrest is a black eye for China in its quest to dominate technologies like 5G networks. Members of the Five Eyes Alliance and U.S. politicians have repeatedly warned Canada that Huawei should not be involved in building this next-generation infrastructure, which is particularly vulnerable to espionage.

Texas senator Ted Cruz tweeted on Dec. 6 that Huawei is a “Communist Party spy agency thinly veiled as a telecom company” with clients being rogue regimes such as Iran, Syria, North Korea, and Cuba.

“The Chinese Communist Party cannot risk damage to their reputation that the transparency of a trial will bring, and they will do everything possible to intimidate the Canadian government to send [Meng] back to China,” he said.

Jeffrey Sonenfeld of the Yale School of Management told CNBC that Huawei is a very controversial company and this latest incident has shown that Canada and the United States are cooperating well. Having like-minded allies is proving critical.

“There is a positive,” he said. “Our allies are united … in terms of enforcing these kinds of sanctions … Good for Canada for standing by us.”

Bigger Stakes

The world’s two largest economies are in competition economically and philosophically and technology is one battle neither wants to lose, regardless of what positive vibes came out of the G20.

“Technology and economic capability are ultimately the biggest factors in deciding the pecking order of nations. … The broad-based Western challenge to Huawei underscores the extreme difficulty of achieving a grand Sino-American compromise,” said Matt Gertken, vice president of geopolitical strategy for BCA Research, in an interview.

Gertken envisions the United States continuing to use punitive measures to deal with national security threats from China. The U.S. demands of stopping theft of intellectual property, forced transfer of technology, and cyber espionage would slow China’s economic growth model and mercantilist threat.

“China will be fearful of making painful structural concessions. The result is likely to be an escalation in U.S.–China conflict in 2019 or, at latest, ahead of the 2020 elections,” Gertken said.

Sonenfeld also reflected the comments of some CEOs who are worried about going to China. A Canadian trade mission to Asia reportedly omitted visiting China.

Global Affairs Canada maintains that Canadians should exercise a high degree of caution for travel to China, but that it has not increased its risk level since Meng’s arrest.

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