By: Jane Perlez
BEIJING — The arrest of one of China’s leading tech executives by Canadian police for extradition to the United States has unleashed a combustible torrent of outrage and alarm among affluent and influential Chinese, posing a delicate political test for President Xi Jinping and his grip on the loyalty of the nation’s elite.
The outpouring of conflicting sentiments — some Chinese have demanded a boycott of U.S. products while others have expressed anxiety about their investments in the United States — underscores the unusual, politically charged nature of the Trump administration’s latest move to counter China’s drive for technological superiority.
In a hearing Friday in Vancouver, Canadian prosecutors said the executive, Meng Wanzhou of the Chinese telecom giant Huawei, faced accusations of participating in a scheme to trick financial institutions into making transactions that violated U.S. sanctions against Iran.
Unlike a new round of tariffs or more tough rhetoric from U.S. officials, the detention of Meng, the company’s chief financial officer, appears to have driven home the intensifying rivalry between the United States and China in a visceral way for the Chinese establishment — and may force Xi to adopt a tougher stance against Washington, analysts said.
In part, that is because Meng, 46, is so embedded in that establishment herself.
She is one of China’s most prominent businesswomen — well-traveled, fluent in English, the heir apparent to a global technology firm that is a source of pride for both ordinary Chinese and the ruling Communist Party. She is also the daughter of the company’s legendary founder, Ren Zhengfei, who built the company after a stint in the People’s Liberation Army. That makes her corporate royalty in China — the equivalent of someone like Sheryl Sandberg, if Sandberg were also the daughter of an American tech pioneer such as Steve Jobs.
Now Meng is in custody, after being detained during an airport layover in Vancouver on Saturday, and the outcry has put the Chinese leadership on the spot. Xi faces competing pressures — to show strength, perhaps by retaliating against the United States, but also to limit the cost of rising tensions and the trade war with Washington on China’s ruling class.
“Her arrest will have phenomenal repercussions in China,” said Tao Jingzhou, a corporate lawyer in Beijing.
“The wealthy have already been worried for a long time about their safety and their wealth in America,” he added. “If the U.S. is going to pursue corruption and extraterritorial laws, that will increase.”
Though Xi’s status as China’s paramount leader is unchallenged, his management of the economy and relations with the United States had come under criticism before Meng’s arrest, with some blaming him as pushing overly ambitious policies that aggravated the Trump administration and provoked the trade war.
Deng Yuwen, a political analyst in Beijing, said conservative forces in the Chinese government and society could use Meng’s arrest to resist concessions as trade talks unfold in the next few months.
“If the U.S. makes an example of Huawei, the conservative nationalist forces in China and also the military will be very unhappy, and that will make it even more difficult to make compromises with the United States,” he said.
“In the short term, the United States might gain from playing this card, but in the longer term, it doesn’t gain from this,” Deng added. “This will make it harder for the reformers to speak up.”
Xi has not publicly commented on Meng’s detention, but the Chinese Foreign Ministry has objected forcefully and demanded her release. A spokesman, Geng Shuang, said Washington needed to explain why Meng was being held and accused Canada and the United States of violating her rights.
On Friday, a Canadian prosecutor said Meng had “direct involvement” in a scheme in which Huawei used a Hong Kong company to make transactions in Iran and do business with telecom companies there. Banks cleared financial transactions for Huawei, inadvertently doing business with the Hong Kong company, the prosecutor said.
In a statement, Huawei said it had “every confidence that the Canadian and U.S. legal systems will reach the right conclusion.”
But Chinese social media has lit up with commentary on American wickedness. Many users have maintained that Meng has essentially been abducted by the United States, and argued that Chinese are no longer safe anywhere. Others have accused the United States of overreach, asking why Huawei’s activities in Iran should be subject to U.S. laws.
The backlash against the United States can be traced in part to national pride in Huawei, which is seen in China as a homegrown corporate success story — a local firm that has bested foreign rivals to become one of the world’s dominant manufacturers of telecom hardware and other cutting-edge technology. Based in the southern city of Shenzhen, it employs about 180,000 people around the world, and Huawei phones are the most prized possessions of tens of millions of Chinese, far outselling the iPhone in China.
While foreigners may be interested in whether Meng was traveling on a Chinese passport, “for the Chinese public, it doesn’t matter. We know she is the daughter of Ren Zhengfei. That is enough,” said Yu Yongding, a prominent economist at the Chinese Academy of Social Sciences. “This is China’s best company.”
Wu Xinbo, a professor of international studies at Fudan University, said many Chinese will see Meng’s arrest as part of an attempt by the United States to force China to continue manufacturing low-end consumer goods and prevent it from moving up to produce more advanced and valuable products.
People in China are aware that Washington considers Huawei to be an arm of Chinese intelligence and has cited security risks in urging allies around the world to avoid its equipment. But they think that is unproven and unfair.
“It’s not necessary to kill Huawei,” said Cheng Xiaohe, professor of international relations at Renmin University. “To kill Huawei is like killing Boeing.”
Source: Economic Times