Dow plunges 700 points after arrest of Chinese tech exec

Trouble

The Chinese government "has made clear our solemn positions to the USA and Canada", Mr. Geng said.

The arrest, understood to have happened on December 1, is related to alleged violations of USA sanctions, according to reports.

The Embassy of the People's Republic of China in Canada said that it resolutely opposes Meng's arrest and demands her immediate release.

According to the Globe and Mail, Meng was arrested in Vancouver on December 1 and has a bail hearing on December 7.

"China should be fully prepared for an escalation in the #tradewar with the USA, as the United States will not ease its stance on China, and the recent arrest of the senior executive of #Huawei is a vivid example", the tweet, which had opposing fists with Chinese and U.S. flags superimposed upon them, said.

The Wall Street Journal reported in April that US Department of Justice had opened an investigation into suspected violations of Iran sanctions by Huawei.

"Investors may fear this will stir up tensions between China and the United States", says Russ Mould, investment director at AJ Bell, referring to the arrest.

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. In October, the USA said Belgium extradited a Chinese intelligence official accused of stealing trade secrets from US companies - an unprecedented development.

Meng...to face unspecified charges in the Eastern District of NY, when she was transferring flights in Canada.

The arrest of Huawei CFO Meng Wanzhou in Canada on Wednesday brought the Chinese telecom giant's business practices under global scrutiny and raised questions about the state of tenuous trade negotiations between the US and China.

Senior Huawei executive arrested in Canada
Meng is the deputy chair of Huawei's board and is the daughter of company founder Zhengfei Ren, from his first marriage. According to the Globe and Mail , Meng was arrested in Vancouver on December 1 and has a bail hearing on December 7.

It's hard to overstate the size and importance of Huawei both within and outside of China, and how shocking this arrest is.

Jia Wenshan, a professor at Chapman University in California, said the arrest "runs a huge risk of derailing the U.S".

Huawei has said it complies with all applicable export control and sanctions laws and USA and other regulations.

US stocks tumbled in early trading Thursday following a sell-off in overseas markets, knocking more than 450 points off the Dow Jones Industrials Average. Meanwhile unconfirmed reports surfaced in April that the USA was investigating Huawei for possibly violating Iran export bans, a scenario that got fellow Chinese firm ZTE into significant trouble earlier this year.

"At the request of the U.S. side, the Canadian side arrested a Chinese citizen not violating any American or Canadian law". Earlier this year, it was reported that Huawei continued to sell network equipment to the Persian Gulf nation despite Washington's punitive measures.

Meng's arrest has "potentially huge implications" for the trade war and signals the USA government is willing to get tough on Chinese companies that do business with Iran, according to Michael Every, head of Asia-Pacific research at investment bank Rabobank.

Huawei is one of the world's largest telecommunications equipment and services providers.

Senator Chris Van Hollen, a Maryland Democrat, said Wednesday night that Huawei and ZTE "are two sides of the same coin - Chinese telecommunications companies that represent a fundamental risk to American national security".

What are the Iran sanctions?

The US later replaced the ban with a fine and governance changes.

Huawei, along with many other Chinese phone manufacturers and telecom equipment makers, is viewed with significant suspicion by the "Five Eyes" intelligence alliance, comprised of Australia, Canada, New Zealand, the United Kingdom, and the United States. "The US has identified that China has found a backdoor to enter the US market through venture capitalists and private investors but those are also now shutting down gradually".

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