From Trade War To Political Kidnapping – Two Canadians Held “Hostage” As China Retaliates

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Dec 13 2018
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Those who live in glass houses should not throw stones, says a popular Western proverb. But as trade war between the United States and China escalates, the business world was shocked at the arrest of Huawei’s CFO (chief financial officer), Sabrina Meng Wanzhou, in Vancouver, Canada, while she was transferring flights in the country.


Also known as Cathy Meng, Sabrina serves as deputy chairwoman of Huawei’s board and on the highway to take over the corporation from her father – Huawei’s founder Ren Zhengfei. Her arrest is reportedly related to alleged violations of U.S. sanctions against Iran, and probably Cuba, Sudan and Syria. It was a slap in the face of the Chinese for obvious reason.


Her arrest on Dec 1, the same night that U.S. President Donald Trump and Chinese President Xi Jinping dined together in Buenos Aires and agreed to a 90-day trade truce, were seen as a deliberate act to humiliate the Chinese leader. Trump administration has claimed ignorance over the arrest of Sabrina, but very few believe the president was not kept in the loop.

Huawei CFO Sabrina Meng Wanzhou

Trump said he would intervene with the U.S. Justice Department in the case against the Huawei’s top executive if it would help secure a trade deal with Beijing. But it was at the request of U.S. authorities that Sabrina Meng Wanzhou was arrested in Canada on charges of violating U.S. sanctions against Iran. And isn’t this a confession that Sabrina was kidnapped in exchange for a ransom?


The arrest of Sabrina, widely perceived as a “political kidnapping” in China, is a new low in the bilateral relationship between both countries. It also demonstrates how low Trump is willing to go so that he can gloat and brag about a victory. Many U.S. banks, such as JPMorgan Chase, had violated U.S. sanctions on Iran too, but neither their CEO nor CFO was arrested.


In 2011, JPMorgan Chase agreed to pay US$88.3 million as part of a settlement with the Treasury Department over a series of transactions involving Cuba, Iran and Sudan. The U.S. bank had processed wire transfers totalling around US$178.5 million, violating United States embargo laws. This year, the same bank was slapped with US$5.3 million in settlements for violation in U.S. sanctions – 87 times!

China vs United States - President Xi Jinping vs President Donald Trump

In his obsession to assert America’s dominance over China, President Trump has positioned his administration as a hypocrite who practices double standard. The U.S. rarely arrests senior businessmen or businesswomen, U.S. or foreign, for alleged crimes committed by their companies. Corporate managers are usually arrested for their alleged personal crimes, such as embezzlement or bribery.


Of course, there were truckloads of financial institutions found to have violated U.S. sanctions since 2010 – Bank of America, Deutsche Bank, HSBC, National Bank of Abu Dhabi, Wells Fargo, Standard Chartered, Bank of Tokyo-Mitsubishi, Toronto-Dominion Bank and the list go on. However, none of the CEOs or CFOs of these banks were grabbed off a plane and whisked into custody.


Hence, you don’t need a rocket scientist to tell how furious the Chinese was when their treasured 46-year-old Sabrina Meng was handcuffed and thrown into a Canadian correction centre like a notorious criminal. China has threatened Canada with grave consequences if the Huawei CFO is not released. And Beijing appears to have made good of its promise.

North Korea Kim Jong-Un with Canadian Michael Spavor

Canadian Michael Spavor with North Korea Kim Jong-Un

Canada now tastes its own medicine, scrambling to find out the fate of two of its citizens, believed to have been held hostage in a tit-for-tat retaliation from Beijing. Canadian Foreign Minister Chrystia Freeland said it has been unable to contact Canadian businessman Michael Spavor since he notified the government that he was being questioned by Chinese authorities.


Earlier, another Canadian citizen – former diplomat Michael Kovrig – was reportedly detained on Monday by the Chinese authorities. China had so far not linked Kovrig’s detention to the arrest in Vancouver on Dec. 1 of Huawei Technologies Chief Financial Officer Meng Wanzhou. But it’s obvious that the detention of both Kovrig and Spavor is revenge over Sabrina’s arrest in Canada.


Seriously, how hard would it be to slap some wild accusations on the Canadians? After all, Canada is dealing with the Chinese Communist Party. Michael Spavor is reportedly being investigated in China on suspicion of harming China’s national security. Mr. Spavor lives in China, where he runs Paektu Cultural Exchange, a company that helps to facilitate trips to North Korea.

Michael Kovrig - Canadian Ex-Diplomat

Coincidentally, Michael Kovrig is being held for the same reason – “suspected of participating in activities that harm China’s national security.” The former diplomat is working for the International Crisis Group (ICG) as its northeast Asia senior adviser. Under the law, Chinese police and state security can detain and interrogate people they consider witnesses in criminal investigations.


Donald Trump might not have realised it, but his political manoeuvre is as good as a declaration of war on China’s business community. More importantly, it puts American business people travelling abroad at much greater risk of being mistreated – even held hostage – by other countries. The U.S. and Canada have opened the floodgate where their citizens now risk being detained by China.


U.S. companies have started restricting their executives from travelling to China for fear of retaliation. Cisco Systems Inc., for example, is restricting non-essential travel by U.S.-based employees into China. Similarly, Chinese-based companies have cut short on unnecessary travels to the U.S. and Canada.

Canada-China Crisis - Retaliation Over Arrest of Huawei CFO Sabrina Meng


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