Chinese telecommunications giant Huawei hopes that the US Department of Justice’s decision to abandon its efforts to extradite Meng Wanzhou could mark the start of a new era in relations between the company, China and the US government. .
Meng, the firm’s chief financial officer and daughter of its founder, was released last month after three years of house arrest in Canada following an agreement with the Department of Justice to stay fraud charges against her .
The case has poisoned Beijing’s relations with Washington and Ottawa, and sources closely involved in Huawei’s three-year legal battle to block his extradition see his release as the removal of an obstacle in relations between the company and American authorities, and even between China and the United States.
But the extent to which the Meng case can signal a wider improvement in bilateral relations is disputed. Chinese state news agencies have been aggressive in their comments on his case, citing it as another sign of America’s decline.
The United States should soon engage with China on the conditions for the lifting of trade tariffs imposed by Donald Trump, in a first test to see if the two countries can find a way to coexist economically. A source said: “The United States had focused so much on Huawei and that made it more complicated because the case against Huawei is very difficult to resolve.”
The sources said that although Meng described her detention as an invaluable experience, it sometimes made her very depressed and almost panicked that the case would never end.
Hours after his release on September 24, the Chinese government released two Canadians, Michael Spavor and Michael Kovrig. Huawei executives insisted they were not aware of the two men’s release until Meng was on a plane back from Vancouver to China. They say all negotiations on the two took place on an entirely separate track and were not raised directly during the 18 months of talks between the U.S. Department of Justice and Huawei attorneys.
Nonetheless, the speed with which Spavor and Kovrig were released hours after the United States abandoned their extradition request exposed the Chinese government’s fiction that their affairs were independent of Meng.
Some Huawei lawyers spent 18 months participating in negotiations for her release, much of it in Washington, and didn’t really think she would be released for about eight or nine weeks before appearing in court via video link to accept a deferred prosecution agreement. As part of the deal, she pleaded not guilty to fraud charges, but admitted to misleading HSBC’s 2013 bankers at the company.
During the talks, the US Department of Justice discussed different avenues for her release, initially including reaching a global deal that could cover not only Meng, but the charges against Huawei itself.
Huawei and Meng had both been accused of misleading HSBC about the extent of Huawei’s ties to a subsidiary that traded in Iran in violation of US sanctions law.
Huawei opted for a separate deal for Meng because he felt the case against the company would be difficult to resolve. Huawei has been indicted by the Justice Department on 19 different counts, and lawyers dispute how Meng’s confession weakens Huawei’s future defense.
The negotiations between the Justice Department and Huawei were largely apolitical, and a source familiar with the matter said the hope was that the relationship with Biden “can be more rules-based, realistic and pragmatic.”
Relations from the Chinese perspective cannot be worse under Biden than they were under Trump. A source said, “This is a good starting point for a different relationship between the United States and China. This is going to take a lot of wisdom.
Meng’s lawyers set two conditions for the negotiations: she would never plead guilty, and she would never come to the United States to sign the proposed deferred prosecution agreement, which has always been the preferred way out. The two sides moved, including admitting that it had misled HSBC about its ties to the company in trading in Iran.
It seems Meng decided to make a deal because the alternative – if she lost the extradition case in B.C. – was that she would still stay in Canada for another three to five years while her appeal went through. courts.
Meng, the eldest daughter of Ren Zhengfei, who founded Huawei in 1987, returned to welcoming a heroine to China.
Washington’s aggressive atmosphere towards Huawei seems unlikely to abate.
There are more than 300 Chinese companies on the list of banned entities in the United States, including since 2019, Huawei. The United States claims the company is capable or has used its equipment to spy on behalf of the Chinese state. He lobbied Huawei’s sales by invoking the foreign direct products rule, demanding US approval for non-US companies selling products to Huawei if they are made with manufacturing equipment and tools. of American chips.