China pressures US, Canada ahead of Huawei hearing

Published 12-10-2018

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VANCOUVER, British Columbia (AP) - China raised the pressure on the United States and Canada as a bail hearing resumed Monday for a top Chinese technology executive in a case that has fueled U.S.-China trade tensions and roiled financial markets.

Meng Wanzhou, the chief financial officer of Chinese telecommunications giant Huawei and daughter of its founder, was detained at the request of the U.S. during a layover at the Vancouver airport on Dec. 1 - the same day that Presidents Donald Trump and Xi Jinping of China agreed to a 90-day cease-fire in a trade dispute that threatens to disrupt global commerce.

The U.S. has accused Huawei of using a Hong Kong shell company to sell equipment in Iran in violation of U.S. sanctions. It also says that Meng and Huawei misled banks about the company's business dealings in Iran.

Her arrest has fueled U.S.-China trade tensions at a time when the two countries are seeking to resolve a dispute over Beijing's technology and industrial strategy. Both sides have sought to keep the issues separate, at least so far, but the arrest has roiled markets, with stock markets worldwide down again Monday.

China formally protested to the ambassadors of both Canada and the United States over the weekend.

In urging the court to reject Meng's bail request, a prosecutor said Friday the Huawei executive had vast resources and a strong incentive to bolt: She's facing fraud charges in the United States that could put her in prison for 30 years.

On Monday, David Martin, Meng's lawyer, reiterated that Meng was willing to pay for a surveillance company to monitor her and wear an ankle monitor. Called by the defense, Scott Filer of Lions Gate Risk Management group said his company would make a citizen's arrest if she breaches bail conditions.

Under the defense proposal, Meng's travels would be restricted to Vancouver and surrounding municipalities. Martin said Meng's husband would put up both of their Vancouver homes plus $1 million Canadian ($750,000) for a total value of $15 million Canadian ($11.2 million) as collateral.

The hearing has sparked widespread interest, and the courtroom was packed again Monday with media and spectators, including some who came to support Meng. One man in the courtroom gallery brought binoculars to have a closer look at Meng, her lawyers and the prosecution team. Outside court a man and woman held a sign that read "Free Ms. Meng."

Over the weekend, China's Vice Foreign Minister Le Yucheng summoned Canadian Ambassador John McCallum and U.S. Ambassador Terry Branstad.

Le warned both countries that Beijing would take steps based on thei

On Monday, David Martin, Meng's lawyer, reiterated that Meng was willing to pay for a surveillance company to monitor her and wear an ankle monitor. Called by the defense, Scott Filer of Lions Gate Risk Management group said his company would make a citizen's arrest if she breaches bail conditions.

Under the defense proposal, Meng's travels would be restricted to Vancouver and surrounding municipalities. Martin said Meng's husband would put up both of their Vancouver homes plus $1 million Canadian ($750,000) for a total value of $15 million Canadian ($11.2 million) as collateral.

The hearing has sparked widespread interest, and the courtroom was packed again Monday with media and spectators, including some who came to support Meng. One man in the courtroom gallery brought binoculars to have a closer look at Meng, her lawyers and the prosecution team. Outside court a man and woman held a sign that read "Free Ms. Meng."

Over the weekend, China's Vice Foreign Minister Le Yucheng summoned Canadian Ambassador John McCallum and U.S. Ambassador Terry Branstad.

Le warned both countries that Beijing would take steps based on their response. Asked Monday what those steps might be, Chinese Foreign Ministry spokesman Lu Kang said only that "it totally depends on the Canadian side itself."

The Canadian province of British Columbia has already canceled a trade mission to China amid fears China could detain Canadians in retaliation for Meng's detention.

Stocks around the world fell Monday over investor concerns about the continuing U.S.-China trade dispute, as well as the cloud hanging over Brexit negotiations after Britain's prime minister postponed a vote on her deal for Britain to exit the European Union. In the U.S., stocks were volatile, tumbling in the morning and then recovering ground in the afternoon.

The Huawei case complicates efforts to resolve a U.S.-China trade dispute. The United States has slapped tariffs on $250 billion in Chinese imports, charging that China steals American technology and forces U.S. companies to turn over trade secr

The hearing has sparked widespread interest, and the courtroom was packed again Monday with media and spectators, including some who came to support Meng. One man in the courtroom gallery brought binoculars to have a closer look at Meng, her lawyers and the prosecution team. Outside court a man and woman held a sign that read "Free Ms. Meng."

Over the weekend, China's Vice Foreign Minister Le Yucheng summoned Canadian Ambassador John McCallum and U.S. Ambassador Terry Branstad.

Le warned both countries that Beijing would take steps based on their response. Asked Monday what those steps might be, Chinese Foreign Ministry spokesman Lu Kang said only that "it totally depends on the Canadian side itself."

The Canadian province of British Columbia has already canceled a trade mission to China amid fears China could detain Canadians in retaliation for Meng's detention.

Stocks around the world fell Monday over investor concerns about the continuing U.S.-China trade dispute, as well as the cloud hanging over Brexit negotiations after Britain's prime minister postponed a vote on her deal for Britain to exit the European Union. In the U.S., stocks were volatile, tumbling in the morning and then recovering ground in the afternoon.

The Huawei case complicates efforts to resolve a U.S.-China trade dispute. The United States has slapped tariffs on $250 billion in Chinese imports, charging that China steals American technology and forces U.S. companies to turn over trade secrets. Tariffs on $200 billion of those imports were scheduled to rise from 10 percent to 25 percent on Jan. 1.

But over dinner Dec. 1 with Xi in Buenos Aires, Argentina, Trump agreed to delay the tariff increase for 90 days, buying time for more negotiations.

Bill Perry, a trade lawyer with Harris Bricken in Seattle, said China's decelerating economy is putting pressure on Xi to make concessions before U.S. tariffs go up. "They need a trade deal. They don't want the tariffs to go up to 25" percent, said Perry, who publishes the "US China Trade War" blog. "This is Damocles' sword hanging over the Chinese government."

Huawei, the biggest global supplier of network gear for phone and internet companies, has become the target of U.S. security concerns because of its ties to the Chinese government. The U.S. has pressured other countries to limit use of its technology, warning they could be opening themselves up to surveillance and theft of information.

Lu, the Foreign Ministry spokesman, accused unnamed countries of hyping the "so-called" threat. "I must tell you that not a single piece of evidence have they ever presented to back their allegation," he said. "To create obstacles for companies' normal operations based on speculation is quite absurd."

Canadian officials have declined to comment on Chinese threats of retaliation, instead emphasizing the independence of Canada's judiciary and the importance of Ottawa's relationship with Beijing.

___

Gillies reported from Toronto. Wiseman contributed from Washington. Associated Press writers Ken Moritsugu, Christopher Bodeen and researcher Shanshan Wang in Beijing contributed to this report.

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People hold a sign at a Vancouver, British Columbia courthouse prior to the bail hearing for Meng Wanzhou, Huawei's chief financial officer on Monday, December 10, 2018. Meng Wanzhou was detained at the request of the U.S. during a layover at the Vancouver airport on Dec. 1.(Jonathan Hayward/The Canadian Press via AP) - The Associated Press


People line up at a Vancouver, British Columbia courthouse prior to the bail hearing for Meng Wanzhou, Huawei's chief financial officer on Monday, December 10, 2018. Meng Wanzhou, the chief financial officer of telecommunications giant Huawei and daughter of its founder, was detained at the request of the U.S. during a layover at the Vancouver airport on Dec. 1. (Jonathan Hayward/The Canadian Press via AP) - The Associated Press


A man arranges magazines near newspapers with the headlines of China outcry against U.S. on the detention of Huawei's chief financial officer, Meng Wanzhou, at a news stand in Beijing, Monday, Dec. 10, 2018. China has summoned the U.S. ambassador to Beijing to protest Canada's detention of an executive of Chinese electronics giant Huawei at Washington's behest and demand the U.S. cancel an order for her arrest. (AP Photo/Andy Wong) - The Associated Press


A woman takes a copy of a newspaper near another with the headline of China outcry against U.S. on the detention of Huawei's chief financial officer, Meng Wanzhou, at a news stand in Beijing, Monday, Dec. 10, 2018. China has summoned the U.S. ambassador to Beijing to protest Canada's detention of an executive of Chinese electronics giant Huawei at Washington's behest and demand the U.S. cancel an order for her arrest. (AP Photo/Andy Wong) - The Associated Press


In this undated photo released by Huawei, Huawei's chief financial officer Meng Wanzhou is seen in a portrait photo. China on Thursday, Dec. 6, 2018, demanded Canada release the Huawei Technologies executive who was arrested in a case that adds to technology tensions with Washington and threatens to complicate trade talks. (Huawei via AP) - The Associated Press


In this courtroom sketch, Meng Wanzhou, right, the chief financial officer of Huawei Technologies, sits beside a translator during a bail hearing at British Columbia Supreme Court in Vancouver, on Friday, Dec. 7, 2018. Meng faces extradition to the U.S. on charges of trying to evade U.S. sanctions on Iran. She appeared in a Vancouver court Friday to seek bail. (Jane Wolsak/The Canadian Press via AP) - The Associated Press


In this courtroom sketch, Meng Wanzhou, right, the chief financial officer of Huawei Technologies, sits beside a translator during a bail hearing at British Columbia Supreme Court in Vancouver, on Friday, Dec. 7, 2018. Meng faces extradition to the U.S. on charges of trying to evade U.S. sanctions on Iran. She appeared in a Vancouver court Friday to seek bail. (Jane Wolsak/The Canadian Press via AP) - The Associated Press


In this courtroom sketch, Meng Wanzhou, right, the chief financial officer of Huawei Technologies, sits beside a translator during a bail hearing at British Columbia Supreme Court in Vancouver, on Friday, Dec. 7, 2018. Meng faces extradition to the U.S. on charges of trying to evade U.S. sanctions on Iran. She appeared in a Vancouver court Friday to seek bail. (Jane Wolsak/The Canadian Press via AP) - The Associated Press


A British Columbia sheriff looks on as people line up at a Vancouver courthouse prior to the bail hearing for Meng Wanzhou, Monday, December 10, 2018. Wanzhou, the chief financial officer of telecommunications giant Huawei and daughter of its founder, was detained at the request of the U.S. during a layover at the Vancouver airport on Dec. 1 (Jonathan Hayward/The Canadian Press via AP) - The Associated Press


A woman walks past an electronic board showing Hong Kong share index outside a local bank in Hong Kong, Monday, Dec. 10, 2018. Asian markets were broadly lower Monday after China protested the arrest of a senior executive of Chinese electronics giant Huawei, who is suspected of trying to evade U.S. trade curbs on Iran. (AP Photo/Vincent Yu) - The Associated Press