Huawei arrest stokes fears of China reprisals


Huawei arrest stokes fears of China reprisals
A man walks by a Huawei logo at a shopping mall in Shanghai, China December 6, 2018. REUTERS/Aly Song

At a closed-door security meeting of U.S. companies in Singapore on Thursday, one topic was high on the agenda: the arrest of a top executive at Chinese tech giant Huawei and the potential backlash on American firms operating in China.

Officials from major U.S. companies who attended the event, a scheduled meeting of the local chapter of the U.S. Department of State’s Overseas Security Advisory Council (OSAC), voiced concerns about retaliation against American firms and their executives, two people with knowledge of the meeting said.

A number of attendees said their companies were considering restricting non-essential China travel and looking to move meetings outside the country, one of the people added.

Security executives for companies including Walt Disney Co, Alphabet Inc’s Google, Facebook Inc, and PayPal Holdings Inc attended the meeting, according to the sources and a LinkedIn posting by one of the attendees.

The companies all declined to comment or did not immediately respond to requests for comment.

The discussions at the meeting underscore concerns rippling through U.S. businesses in the world’s second largest economy, already facing a delicate balancing act amid a tense trade standoff between Washington and Beijing.

The formal agenda for the meeting, held at Google’s Asia-Pacific headquarters in Singapore, included presentations on economic crime and terrorism in the region. OSAC promotes “security cooperation between American private sector interests worldwide and the U.S. Department of State,” according to its website.

But conversation soon turned to possible risks in China prompted by the arrest of Meng Wanzhou, the chief financial officer and “heiress” of Chinese telecom network equipment giant Huawei Technologies Co Ltd, who was detained in Canada on Dec. 1. The news of the arrest was made public on Wednesday.

Meng, the daughter of Huawei’s founder, was held at Washington’s request as part of a U.S. investigation of an alleged scheme to use the global banking system to evade U.S. sanctions against Iran, people familiar with the probe said.

The arrest has roiled global markets amid fears that it could further inflame the Sino-U.S. trade row.

Risk consultants and analysts said that the arrest could prompt Beijing to retaliate in some form.

“This will pressure a lot of Chinese officials to look strong in this dispute,” said Nick Marro, Hong Kong-based Asia analyst at the Economist Intelligence Unit, who added that technology companies were particularly at risk.

“This could mean either taking a stronger stance on trade negotiations, or taking a stronger stance on U.S. tech firms in China right now.”

Asked whether there would be any retaliation against any foreign executives in China, Foreign Ministry spokesman Geng Shuang said on Friday China has always protected the lawful rights of foreigners in China in accordance with the law.

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