Asian stocks were hit hard last Thursday morning by the news of the arrest of the daughter of the founder of Huawei, the Chinese tech company, in Canada.
Meng Wanzhou is also the chief financial officer of Huawei. She was arrested in Canada on the 1st of December. She is set to face extradition to the United States of America.
She was arrested because of allegations regarding the violation of the sanctions that were imposed by the United States.
Her surprising arrest casts doubt on the seeming easing of the economic tensions between the US and China.
Asian stocks dropped last Thursday morning on the news. The index of Asian shares of MSCI excluding Japan was down by 2.22 percent, the Shanghai composite index was down by 1.68 per cent, Hong Kong’s Hang Sen dropped by 2.68 percent, and Japan’s Nikkei 225 was down by 1.91 percent.
The Chinese embassy that is based in Canada said that it opposed her arrest.
In a short statement that was posted on its website, the embassy stated: “The Canadian police, at the request of the United States, arrested a Chinese citizen who had not violated any US or Canadian law.”
It added: “China has already made solemn representations to the United States and Canada, demanding they immediately correct their wrong behaviour and restore Ms Meng Wanzhou’s freedom.”
Meng serves as one of the vice chairs on the board of the Chinese technology company. Huawei is strategically important to the ambitions of China in technology from 5G networks to chips.
In a statement, the company confirmed the arrest. It said that it has been provided with only little information regarding the charges. It added that it was “not aware of any wrongdoing by Ms Meng.”
Previously, it has been reported that US authorities were investigating the second-largest smartphone maker in the world for allegedly shipping US-origin products to Iran and other countries. The act violates the US export and sanctions laws.
The suppliers to the privately owned tech giant also saw their shares affected. The shares of Samsung Electronics was by down 2.29 percent and Chinasoft International was down by 11.93 percent.
Last Wednesday, it emerged that BT had banned the use of the equipment of Huawei in its 5G mobile network because of security concerns.