Dozens of people packed into a Vancouver courtroom on Monday for a bail hearing for Huawei heiress Meng Wanzhou, who has been in Canadian custody since her much-publicized arrest over a week ago, at the request of U.S. authorities.Her release hinges on whether or not Meng, the chief financial officer of the telecom giant, is a flight risk. The hearing will resume on Tuesday.But whatâs actually at stake in this legal battle extends far beyond the courthouse walls, into the geopolitical jousting between two superpowers, with Canada stuck in the middle.The trade war between China and the U.S. is the context for what is essentially a game of chicken between the two biggest, arguably most powerful economies in the world. People are watching the back-and-forth between Washington and Beijing nervously and itâs taken a toll on stock markets. A trade agreement between the two countries who, together, represent nearly half of the worldâs economic output, would be beneficial for both sides.What theyâre actually fighting for is the top spot globally in the coming century, according to the Sprott School of Businessâ Ian Lee. âTheyâre in very serious competition to determine who is going to lead the world for the next fifty to a hundred years,â he says. Lee is an associate professor of business strategy and public policy and he says thereâs a race between these two giants on everything from trade to commercial dominance to talent and ideas. Taking the lead in technology is a key part of that. Enter Huawei.The Bill Gates of ChinaHuaweiâs CFO Meng Wanzhou, is the daughter of Ren Zhengfei, the billionaire who started the multinational company with a few thousand dollars in 1987. âHeâs like the Bill Gates of China,â says Lee. Huawei is the biggest supplier of telecom products in the world and, by revenue, itâs the seventh largest tech company.Lee has taught in China every year for the last twenty years and he says his students have described Huawei as âtheir pride and joy, their crown jewel,â and âa company that has enormous prestige as the supreme Chinese success story.âWhy the arrest?Meng was arrested by Canadian authorities on December 1, during a layover in Vancouver on her way to Mexico. She faces a U.S. extradition request on charges she conspired to defraud banks so they cleared millions of dollars in transactions to Iran, which violates American sanctions.According to at least three experts VICE spoke with, Huawei isnât alone in doing business with Iran. They estimate âhundredsâ of companies are in the same boat, but havenât faced the same kind of repercussions.Gordon Houlden is the director of the China Institute at the University of Alberta. He says the case against Huawei is very specific because Americaâs âunilateral sanctions specifically target companies that utilize U.S. technology or U.S. goods in trade with Iran.âHuawei accused of spyingU.S. authorities have, for years, investigated whether Huawei is involved in espionage for the Chinese government. âTo put it crudely and bluntly as possible, they think Huawei is part of the spying machinery of the Chinese government and therefore, they argue it cannot be trusted,â says Lee.To make things even more complicated, Prime Minister Justin Trudeau was reportedly given a heads-up about the arrest, while U.S. President Donald Trump, was not. Though Canadian authorities carried out the arrest, on Americaâs behalf, Canada is bearing the brunt of the blame on the international public stage. China has hauled in both Canada and the United Statesâ ambassadors in Beijing, demanding answers over the âlawlessâ arrest of Meng.Beijing has been careful to keep trade talks with the U.S. separate from its anger about Mengâs arrest. The goal is not to derail important trade talks between the two countries. But Lee says the two things are absolutely connected, and that means China can be vocal about its displeasure with Canada, not the U.S. Chinese officials have warned that Canada will pay a âheavy priceâ if Meng isnât released. The proceedings have put all Canadian trade talks with China on hold, for now.Canada caught in the middleAll of this puts Canada in a sticky situation. Back to that game of political chicken. Canadaâs economy is dependant and intertwined with both economic giants. The U.S. is Canadaâs biggest trade partner. And like so many other places in the world, Canadian retailers are brimming with Chinese-made products. Not only that but Huawei technology is imbedded in the fabric of Canadaâs telecommunications infrastructure. Lee describes the things that Huawei produces as an integral part of the âbackboneâ of the network in this country that allows us to make phone calls and do things online.Estimates suggest it would cost our major telecom providers about a billion dollars to take out and replace Huawei equipment currently rooted in the countryâs telecom landscape. According to Houlden, companies like Bell, Telus and Rogers chose Huawei because its âequipment is of high quality, but often of lower cost than U.S. competitors.â He cites data costs in Canada, which are some of the highest in the world. Theyâd be even higher without the Huawei factor. All of this leaves Canada in a political and economic tough spot.Cover image: People hold a sign at a B.C. courthouse prior to the bail hearing for Wanzhou Meng, Huawei's chief financial officer, on Monday, December 10, 2018. Jonathan Hayward/The Canadian Press
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