China furious over arrest of Huawei executive as spying row deepens

Investors look at an electronic board showing stock information at a brokerage house in Shanghai China

Huawei's global chief financial officer arrested in Vancouver

Canada's arrest of Huawei Technologies' chief financial officer in Vancouver is fuelling concern that Canadian business people in China are at risk of being arrested in retaliation.

It's hard to overstate the significance of her arrest in Beijing: Meng is the daughter of the founder of Huawei, a national champion at the forefront of Xi's efforts for China to be self-sufficient in strategic technologies.

Norman Villamin, chief investment officer at Switzerland's Union Bancaire Privée, said the US-China clash represented much more than just a tussle over trade.

Meanwhile, a clerk at the B.C. Supreme Court says Meng appeared in court Wednesday and a bail hearing is scheduled for Friday.

"As there is a publication ban in effect, we can not provide any further detail at this time".

Meng was arrested in Vancouver, Canada, on Sunday, and now faces extradition to the United States.

"The company has been provided very little information regarding the charges and is not aware of any wrongdoing by Ms Meng (Wanzhou)", it said.

But casting Huawei as the Chinese equivalent of Apple understates its reach and importance - Huawei also manufacturers a tremendous amount of the equipment used by phone and internet companies, as well as providing IT consulting services both in China and around the globe.

European shares hit a two-year low and indexes across Asia dropped sharply following the arrest.

ENERGY: Benchmark U.S. crude lost $1.00 to $51.89 a barrel in electronic trading on the New York Mercantile Exchange.

"The detention without giving any reason violates a person's human rights".

Beijing has itself frequently been accused by rights groups of rights abuses including unexplained detentions.

Meng's arrest also threatened to inflame disagreements over Iran and Trump's decision to break with other governments and re-impose sanctions over the country's nuclear development.

The CFO, Wanzhou Meng, was arrested for allegedly breaching Iran sanctions.

"This headline is quite significant as the US government is attempting to persuade allies to stop using Huawei equipment due to security fears, and this headline could weigh negatively on tech stocks", said Stephen Innes, head of trading at Oanda in Singapore.

"The timing of the arrest is key here".

Jia Wenshan, a professor at Chapman University in California, said the arrest "runs a huge risk of derailing the U.S".

The FTSE 100 is set to drop around 1% as Thursday's trading kicks off as the global equities market bristles at renewed trade tensions - Trump's Chinese truce evidently didn't last long. After the dinner, the two nations announced they would pause any escalation of tariffs and resume trade negotiations for 90 days.

Hours later, at a regular press briefing, Chinese Foreign Ministry Spokesperson Geng Shuang maintained this strong stance. Moreover, the United States is advising the countries to bare from using Huawei apparatus to introduce new telecommunication technologies.

BT BT.L said on Wednesday it was removing Huawei's equipment from the core of its 3G and 4G mobile operations and would not use the Chinese company in central parts of the next network.

Why is Huawei a concern to the West?

Over the summer, Australia barred Huawei from providing 5G technology for wireless networks in the country over espionage fears.

Faced with this explosive report, Huawei first denied the story, calling the report "unfounded".

The US has brought a number of legal cases against Chinese technology firms, with accusations such as cyber-security theft and violations of Iran sanctions. Three months later, the company eventually reached a deal with USA authorities by paying $1.4 billion in fines, as well as agreeing to overhaul its senior management.

Huawei is not the first Chinese telecoms equipment firm to face the ire of USA authorities.

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