Huawei CFO extradition ‘casts a pall’ over Canada’s business relationship with China

Huawei CFO extradition ‘casts a pall’ over Canada’s business relationship with China

Ottawa’s move to formally authorized the extradition process for Huawei Technologies Co. chief financial officer Meng Wanzhou could throw a wrench in Canada’s overall business dealings with China, its second-largest trade partner after the United States, say experts in Canada-China relations.

Meng is facing extradition to the United States on charges of bank fraud, wire fraud and conspiracies to commit bank and wire fraud over accusations she lied about Huawei’s business dealings in Iran. Canadian authorities arrested her in December in Vancouver, where she is living under supervision after being released on $10-million bail. China subsequently detained of two Canadians and the upgraded a Canadian’s prison term to a death sentence.

On Friday, Department of Justice officials issued an authority to proceed that enables Meng’s case to move to an extradition hearing at which a judge will determine whether the charges qualify as offences under Canadian law and, if so, whether there is sufficient evidence to extradite her to the U.S. A date for the hearing will be scheduled at a British Columbia Supreme Court appearance on Wednesday.

In a statement, Meng’s legal team maintained her innocence and expressed disappointment that the extradition will proceed given the “political nature” of the U.S. charges.

“The President of the United States has repeatedly stated that he would interfere in Ms. Meng’s case if he thought it would assist the U.S. negotiations with China over a trade deal,” lawyer David Martin stated.

Martin also expressed concerns that the charges wouldn’t qualify as offenses in Canada.

Ottawa’s move was expected, but the legal process could take years, University of Alberta law professor Joanna Harrington said. The final extradition decision will be made by the Minister of Justice, who will likely be asked to consider any political circumstances, she said. It would be “very rare” for a minister to disagree with the extradition judge.

As Meng’s legal case unfolds, Huawei continues to fight for access to Western markets as telecoms around the world prepare to build 5G networks. Canadian allies including the U.S., Australia and New Zealand have moved to block Huawei from their 5G networks over fears its gear contains backdoors that could enable the Chinese government to conduct espionage. Huawei insists it operates separately from the government and vows it would never use its equipment for spying.

5G networks

A Huawei booth is seen at a China Mobile 5G experience centre in Shanghai. Huawei is important to China as a “poster child” of a company that can succeed in developed and underdeveloped nations alike, one expert says.

Stringer/AFP/Getty Images

On Thursday, Huawei published a full-page ad in the Wall Street Journal inviting American media to visit corporate headquarters in China to clear up “misunderstandings” the U.S. government has about the telecom.

Last week, its logo was everywhere at the Mobile World Congress in Spain, an event that attracted 100,000 people with name tags hanging from Huawei-branded lanyards.

Huawei is extremely important to the Chinese government as a “poster child” of a company that can succeed in both developed and underdeveloped nations, said University of Alberta Professor Gordon Houlden, director of the China Institute and former foreign service officer in Beijing.

“China really wants a few of their companies to be global brand names in the way Samsung and Honda are, and they don’t really have many candidates,” Houlden said in an interview.

In Canada, Telus Corp. and BCE Inc. have partnered with Huawei to test 5G technology, but neither has officially chosen Huawei as their 5G supplier of choice. Canadian contracts are just a piece of Huawei’s global affairs, but the business is important to China from the perspective of winning in Western nations, Houlden said.

chief financial officer

Gordon Houlden, director of the China Institute

Emma Graney/Postmedia/File

Public Safety Canada is in the midst of a security review of 5G technology, but has yet to make a decision on the use of Huawei equipment. On Friday, a spokesman would not reveal a time frame for a decision.

But Meng’s extradition hearing casts a pall over Canada’s business relationship with China, Houlden said. While he has yet to see evidence that the increased tensions have caused a sharp downturn in trade, he anticipates pressure will increase the longer Meng’s case takes.

“It’s a mess with no clear exit,” he said. “There’s some concern that new initiatives, big projects will be more difficult. I’d like to think the majority of the trade will go forward if only because it’s also very much in China’ s interest.”

Even if the U.S. comes to a trade deal with China, it’s unlikely that Canada’s problems will be resolved as long as Meng is kept here, said Alan Alexandroff, director of the Global Summitry Project at the University of Toronto’s Munk School of Global Affairs.

The U.S. administration’s attempt to decouple itself from China when it comes to trade doesn’t make sense in a global economy, Alexandroff said. The strategy moving forward should be to treat China as “neither friend nor foe,” he added.

“That’s what we need to somehow craft. That’s not going to be easy.”

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