China Prepares Retaliation To Huawei CFO Arrest

As Beijing's outrage over the arrest of Huawei CFO Wanzhou Meng simmers ahead of her Friday arraignment in a Canadian court, Bloomberg has shed some light on how news of her arrest has resonated with different factions in the Chinese leadership.

The upshot is that while officials in charge of managing China's trade negotiations believe China shouldn't allow Wanzhou's arrest to impact trade negotiations, hardline national security officials believe the arrest is an embarrassment to Chinese leader Xi Jinping, who reportedly had 'no idea' that the daughter of a Chinese business icon and Communist Party member had been arrested in Canada - and that China should use trade talks as leverage to demand that she be released.

Western media outlets have reported that, while White House officials and National Security Advisor John Bolton knew about Wanzhou's arrest before Saturday's meeting between Trump and Xi, the president somehow had no idea.

Now, BBG is reporting that Xi similarly had no idea that one of his country's most prominent executives had been taken into custody hours before he sat down with Trump. This asymmetry is viewed as deeply embarrassing to China's leader, and many believe that simply letting trade negotiations to move forward as plan would be an unconscionable capitulation - particularly if (as many analysts believe) the Trump Administration intends to use her arrest as leverage.

Sabrina

Still others believe that Wanzhou's arrest is a "gift" for Xi, because it gives cover for the Chinese to dig in their heels and accuse the US of using the trade war as a pretext to stymie China's ascent as a global superpower. In light of Wanzhou's arrest, such a stance would likely garner more sympathy from the rest of the world.

As China contemplates how to respond, at least there is one silver lining: It helps China appear sincere to the world in wanting to resolve the trade war. He can say he is trying to resolve the issue but the US has an entrenched strategy to cut off China’s rise as a global power - a theme that state-run media picked up on Friday.

"The Huawei arrest gives China’s leaders a huge gift,' said Barry Naughton, a professor at the University of California in San Diego who studies China. "It makes super plausible the narrative they’ve been trying to promote all along: 'The U.S. just can’t stand our rise, they can’t stand to lose their dominance, they can’t treat anybody like an equal.'"

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Gary Anderson 1 week ago Contributor's comment

China probably should not give much on intellectual property. If Meng is prosecuted, it would not surprise me if US exec's in China are arrested. This is about shipping stuff to Iran. There may be more to it but Trump will lose 4.5 billion Asian customers if this keeps up. Bad business all around. Trump never should have brought Yosemite Sam Bolton on board.