China Huawei to step up pressure on Canada and the United States

Huawei plans to announce a lawsuit against the US government while China has accused the detained Canadian citizen of stealing state secrets from another Canadian detainee.

China Huawei to step up pressure on Canada and the United States

Beijing / Ottawa:

The Chinese government and its leading smartphone maker, Huawei Technologies Ltd, stepped up pressure on US and Canadian governments on Monday in a trade and telecommunications technology dispute that buried CFO Huawei, who faces criminal charges US.

China on Monday accused Canadian citizen Michael Kovrig of stealing state secrets from another Canadian detainee, businessman Michael Spavor, in a move likely to increase tension between Ottawa and Beijing.

The telecommunications gear maker is also preparing a lawsuit against the US government over a law that restricts its market access.

This is the latest escalation of an unprecedented crisis for Huawei, the world's largest maker of telecommunications equipment and No. 2 smartphone maker, as Washington calls on governments around the world to stop using its equipment, especially in the next generation of telecommunications networks, known as 5G.

Spavor, a business consultant with deep ties to Pyongyang, has been trying to spark international interest in investing in North Korean economic projects. He and Kovrig, a former diplomat, were arrested in December, shortly after Canada arrested Meng Wanzhou, Huawei's chief financial officer, who is facing extradition to the United States.

The Central Commission of Political and Legal Affairs of the Communist Party said that Kovrig had often entered China with an ordinary passport and business visas, "stealing and spying on sensitive Chinese information and intelligence through contact in China."

"We are obviously very concerned about China's position," Prime Minister Justin Trudeau said on Monday. "We mobilized and defended the two Canadians who were arbitrarily detained by China from the beginning."

Meng's lawyers sued the Canadian government, its border agency and the federal police, alleging that their client was detained, searched and interrogated for three hours in violation of her constitutional rights.

Canada arrested Meng in Vancouver on December 12. 1 at the request of the United States, who accused her of banking and telegraph fraud to violate US sanctions against Iran by doing business through a subsidiary he tried to hide.

Huawei to pursue

In another escalation of the Trans-Pacific conflict, Huawei plans to announce a lawsuit against the US government on Thursday on grounds related to a defense bill, a source familiar with the case said Reuters.

Huawei will challenge an addition to the US National Defense Authorization Act (NDAA) signed last year, which controlled US government contracts with Chinese companies and strengthened the group's role in reviewing foreign investment proposals. Beijing has condemned the NDAA law that targets China.

Trump last year signed the law that limits Huawei and ZTE Corp's access to the US government and military contracts. This is part of a global effort by the United States to close the two companies' access not only to the US market, but to the major telecommunications markets around the world where 5G networks are designed and built.

US lawmakers introduced bills earlier this year that would ban the sale of US chips or other components to Chinese telecom companies that violate US sanctions or export control laws.

US officials have alleged that Chinese telecom manufacturers are producing equipment that allows their government to spy on users overseas, including Western researchers working on advanced technologies. Beijing and Chinese companies repeatedly denied such allegations.

Trump plans to declare a national emergency that would prevent US companies from using the telecommunications equipment manufactured by Huawei and ZTE, three known sources of the situation told Reuters in December.

The Justice Ministry also accused Huawei of robbing T-Mobile US Inc.'s robotic technology.

Trump said in February that he might or might not include Huawei and ZTE in the trade deal being negotiated with China. Trump told White House reporters that US officials were not talking about giving up charges against Huawei.

Also on Monday, US Secretary of State Mike Pompeo said he thought his country and China were "on the verge" of an agreement to end their trade war.

HUAWEI CFO IN THE LIMBS

Meng, who is on bail, is scheduled to appear in a Vancouver court on Wednesday, when a date will be set for his extradition hearing. Ottawa rejects China's calls to release Meng, saying he can not interfere with the judicial system.

The Canadian government approved its extradition proceedings on Friday. China, whose relations with Canada have seriously deteriorated in the case, denounced the decision and repeatedly called for the release of Meng.

It may be years before Meng, the daughter of Huawei's founder, is sent to the United States, as the slowly evolving Canadian justice system allows many decisions to be appealed.