He is currently facing expulsion to the US.
Asia’s stock markets fell sharply on Thursday. They responded to the information about the arrest of the chief financial officer of Chinese telecommunications company Huawei Technologies Meng Wanzhou in Canada. The authorities there arrested Meng Wanzhou at the request of the United States, which suspects her of violating US trade sanctions against Iran.
The Canadian Ministry of Justice spokesman Ian McLeod, Meng Wanzhou, who is also vice-chairman of the Telecommunications Group’s board of directors and daughter of Zheng Feja’s founder, was arrested in Vancouver on Saturday (December 1).
He is currently facing expulsion to the US. This has given rise to nervousness among investors who fear that the latest situation could make the “ceasefire” in China-US trade relations close a few days ago. This was also reflected on Thursday’s development in Asian equity markets.
The main index of the Hong Kong Stock Exchange Hang Seng fell 2.5%. The Tokyo Stock Exchange’s main index, Nikkei 225, fell by 1.91%, but fell briefly by 2.79% during the day. The Shanghai Stock Exchange’s Shanghai Index Composite Index fell 1.68% and Kospi South Korea’s main index 1.6%. Further Asian indexes were also down.
Subsequently, markets in Europe also saw a decline. The German DAX fell 1.6% and the main stock exchange index in Paris CAC 40 by 1.5%. The main index of the London Stock Exchange FTSE 100 also fell to the same extent.
The arrest of Meng Wanzhou occurred on the same day that US President Donald Trump and his Chinese counterpart Si Jinping at the G20 Buenos Aires Summit agreed on a 90-day “truce”. During this period, when negotiations on mutual trade are being conducted, they should not resort to any sanctions.
However, according to some analysts, information on the arrest of a CFO may deteriorate the relationship of the two largest economies. China has already responded and its Foreign Ministry has called on Canada to release Meng Wanzhou immediately. At the same time, the Ministry is asking the US to explain why the chief financial officer of the Chinese Technology Group has been detained.
According to The Wall Street Journal, the New York prosecutor’s office is investigating whether Huawei Technologies has violated US sanctions imposed by Washington on Iran. In the meantime, the Canadian Department of Justice has announced that Meng Wanzhou’s interrogation of the deposit is set for Friday (7 December), but refused to provide further details. Hauwei itself also said that “it is not aware that Meng Wan has done anything illegal”.
However, according to Willy Lama, a political analyst at the University of China in Hong Kong, this case should not interfere with the trade negotiations between Beijing and Washington.
“I think there is too much for Si Jinping at the strike. He has a great deal of interest in the agreement, so I do not expect this event to have a dramatic impact on a possible trade agreement, “Lam said.
On the other hand, it may have a long-term impact. According to Lam, this situation will accelerate China’s actions to reduce its dependence on US technology companies.