Canadian officials have arrested Meng Wanzhou, CFO of Huawei, a telecommunications giant and “China’s largest private enterprise by revenue.” The arrest, described in Chinese media as a “kidnapping,” is widely seen as exacerbating tensions in an ongoing US-China trade war.
The arrest, which Chinese media have called a “kidnapping,” disrupts the conciliatory mood thought to have been created last week at the dinner between U.S. President Donald Trump and Chinese President Xi Jinping. High-tech has immediately been thrust to the forefront of the 90-day trade negotiations.
In a development certain to enrage the Chinese, Trump National Security Adviser John Bolton told National Public Radio on Thursday that he “knew in advance” that the arrest was coming. Bolton said he did not know whether Trump knew going into the dinner with Xi.
Canadian Prime Minister Justin Trudeau told reporters that his government was not politically involved in the arrest, citing judicial independence.
“The appropriate authorities took the decisions in this case without any political involvement or interference. … We were advised by them with a few days’ notice that this was in the works,” he said. “But of course there was no engagement or involvement in the political level in this decision, because we respect the independence of our judicial processes.”
Reuters reported that Meng was arrested as part of a U.S. investigation of an alleged scheme to use the global banking system to evade U.S. sanctions against Iran.(Nikkei)
But to understand what’s really at stake in the struggle between the US and China, it’s crucial to get our terms right, writes David Zweig for Financial Times. “[T]his is not a trade war. The fight over trade is merely a skirmish in a larger technology war, which itself is a component of a long struggle between a global hegemon—the US—seeking to maintain its dominance, and an ascending challenger—China—that feels it has a moral right to reclaim its status as a great power.” It’s not a cold war, either: the two sides are not extricable without disastrous consequences economically, strategically, and militarily.
Faced with Chinese appropriation of US technology, the Trump administration could constrain cooperation with the Chinese to “areas of common interest, such as global health, climate change, nuclear non-proliferation, North Korea, and deterring terrorism,” while excluding Chinese students and researchers from work related to national security and limiting Chinese funding of US tech companies.
Those who advocate “decoupling” risk billions to universities, communities, the tourism industry, corporations, and the mitigation of military confrontations—i.e. the chance to avert real war.
If such a strategy is pursued, “China will attribute this policy to US racism, while the US will no longer be able to argue that it is not trying to contain its rival.” And US allies, pursuing their own interests with China, may not fall in line.
“The Trump administration’s goal is to end China’s state-directed industrial policy. As China is unlikely to concede, this tech war will aggravate Sino-US relations and, if ‘disengagement’ ensues,” writes Zweig, “we are in for a much more rocky road than the imposition of a new cold war might suggest.”