Business

U.S. frames criminal charges against Huawei and Meng, China accuses U.S. of smearing Chinese firms

In a fresh move involving the Chinese tech giant Huawei’s and its Chief Financial officer (CFO) – Meng Wanzhou, the United States (U.S.), has framed a number of criminal charges against them.

The charges include bank fraud, obstruction of justice and theft of technology.

What are the charges
The first indictment by the U.S. Justice Department accuses Huawei of stealing technology from T-Mobile (TMUS), for testing the smartphone durability and of promising bonuses to the employees who helped in gathering confidential information on competitors.

Another accusation against the Chinese firm is of violating U.S. sanctions against Iran by doing business with Tehran through a subsidiary named, ‘’Skycom Tech’.

What has happened so far
Meng Wanzhou, daughter of Huawei’s founder, Ren Zhengfei, was arrested in Vancouver by Canadian Authorities, on request of the U.S., on December 1, 2018. Meng was later released on bail and her next hearing is slated for February 6, 2019 where decision regarding extradition will be taken.

Once the Canadian Government receives a request it will have to decide within 30 days if there are enough evidences t0 pursue extradition

What the U.S. says
Speaking at press conference, FBI Director – Christopher Wray said, “Huawei relied on dishonest business practices that contradict the economic principles that have allowed American companies and the United States to thrive. The prosperity that drives our economic security is inherently linked to our national security. And the immense influence that the Chinese government holds over Chinese corporations like Huawei represents a threat to both.”

What Huawei and China has to say
However, in a statement, Huawei said, “The company denies that it or its subsidiary or affiliate have committed any of the asserted violations of US law set forth in each of the indictments, is not aware of any wrongdoing by Ms. Meng, and believes the US courts will ultimately reach the same conclusion. The allegations of stealing trade secrets were the subject of a settled civil suit, in which a jury found “neither damages nor wilful and malicious conduct”.

The Deputy Director of the Foreign Ministry Information Department of China – Geng Shuang said, “We strongly urge the United States to stop its unreasonable crackdown on Chinese companies, including Huawei. The United States should immediately withdraw its arrest warrant on Ms. Meng and refrain from making a formal extradition request to avoid walking farther down a wrong path.”

Impact on Trade Deal
The move could seriously impact the trade ties between the 2 countries. The charges come at a time when U.S. and China are working out to strike a deal on trade before March 1, 2019, when otherwise tariffs on Chinese imports worth U.S. $ 200 billion will rise to 25% from 10%.

The dispute will definitely impact the Beijing-Washington relations for years to come and could impact the future of both the economies.

Trouble for Huawei globally
Separately, Huawei is going through tough times globally. Earlier this month, a Huawei executive was arrested in Poland on charges of spying for China. The company has since fired the employee. Besides, Germany and other European countries are reportedly considering barring Huawei equipment from the country’s 5G networks. The company is already banned from supplying 5G equipment to Australia and New Zealand.

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