Two Saturdays ago, on 1st December, Meng Wanzhou, the Chief Financial Officer (CFO) of the Chinese telecommunications giant Huawei, was arrested in Vancouver, Canada. Her detention followed a request by American authorities for her arrest and extradition to the United States of America where she is expected to face fraud charges for allegedly using a Huawei subsidiary for over five years to do business in Iran, a violation of U.S. sanctions.
China immediately demanded her release on the grounds that she is being treated inhumanely and the incident attracted the attention of the international diplomatic and business communities. Meng’s arrest came on the heels of the USA and China agreement to a 90-day truce to the introduction of new tariffs in their ongoing trade war, at the G20 Summit in Argentina.
Under the terms of the extradition treaty, the U.S. could have requested Meng’s arrest in Canada if she was wanted in connection with conduct considered criminal in both Canada and the United States, and if the offence carries a jail sentence of a year or more. Canada was compelled to act since the threshold had been met.
Meng’s bail hearing, which is separate from the extradition process and was scheduled to enter a third day, as of writing, has continued to dominate the international headlines, with China threatening serious repercussions if its demands for her immediate release are not met. At a news conference on Monday in Beijing, Chinese foreign ministry spokesman Lu Kang warned, “For Canada, if they do not correctly handle this matter, there will be serious consequences. You asked, what kind of serious consequences would these be? I can tell you in one sentence: It is totally up to Canada.”
According to David Mulroney, Canada’s former ambassador to China, China is about to execute it’s “kill the chicken, scare the monkey “strategy whereby it intimidates a smaller player, in this instance, Canada, to get the large player to do what it wants. The tactic, which is meant to demonstrate just how far China would go defend its national integrity, has more often than not been used as a veiled threat, with China not having to follow through on its ultimatum.
However, China has shown in the past that it is not afraid to pull the trigger when the situation, in their eyes, warrants it. In 2010, when Norway awarded the Nobel Peace Prize to the Chinese Human Rights activist Liu Xiaobo, China and Norway were in the midst of trade negotiations which the former subsequently broke off. Norwegian salmon, which had previously enjoyed a large market in China was later declared to contain a virus and banned from China.
So far, Canada has held firm. Last Thursday, in Montreal, Canadian Prime Minister Justin Trudeau stated, “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.”
As the tension mounts, Canadian businesses operating in China are pondering whether they will face new sanctions or regulatory requirements as Beijing continues to apply political pressure on Ottawa to intervene and release Meng.
The extradition procedure, which can be a long drawn out process, could take months and go all the way to Canada’s Supreme Court. No doubt China will step up the pressure for her release. How long will China wait? How far is China prepared to go in this instance? The questions and possible consequences will only expand with time. One would expect that our Foreign Affairs ministry is following this incident very closely, as we currently enjoy very good relationships with both countries
Canada, caught between a rock and a hard place, is not expected to blink here. The Canadian Courts are expected to apply the law of the land, free of political intervention.
For the next few weeks, possibly months, Meng Wanzhou will be at the centre of the international business and diplomatic world. However, the big question remains, how far is China prepared to go to kill the chicken?
