Wanzhou Meng, arrested December 1 in Vancouver and facing possible extradition to the us, had a bail hearing today in which it was made clear that she is looking at some serious jail time for allegedly misrepresenting to authorities the relationship between Huawei and SkyCom, which did business in Iran.
The discussions at the meeting underscore concerns rippling through USA businesses in the world's second largest economy, already facing a delicate balancing act amid a tense trade standoff between Washington and Beijing.
"This is one of the U.S.'s many tactics and tools used in its trade war with China to maximize its gains". AAC Technologies fell about 8 per cent over the two days of trading, Sunny Optical shed about 9 per cent as China's CSI 300 index of major Shanghai and Shenzhen-listed companies fell more than 2 per cent. Hong Kong's Hang Seng continued the decline on Friday dropping 0.35 per cent after shedding falling 2.5 per cent the previous day.
The outpouring of conflicting sentiments - some Chinese have demanded a boycott of USA products while others have expressed anxiety about their investments in the United States - underscores the unusual, politically charged nature of the Trump administration's latest move to counter China's drive for technological superiority.
The official acknowledged that the arrest could complicate efforts to reach a broader US-China trade deal but would not necessarily damage the process.
"China talks", said Philip Levy, senior fellow at the Chicago Council on Global Affairs and an economic adviser in President George W. Bush's White House.
At a closed-door security meeting of U.S. companies in Singapore on December 6, one topic was high on the agenda: the arrest of a top executive at Chinese tech giant Huawei and the potential backlash on American firms operating in China.
Huawei was founded to sell phone switches but it is now the world's biggest supplier of network gear for phone and internet companies. The Crown lawyer told the hearing that the US alleges Huawei Technologies used subsidiary Skycom to do business with Iran, violating sanctions against that country.
They also cited her refusal to visit the U.S., where her son attends school, as evidence of a sustained effort to evade a criminal investigation.
Jeff Vinnick via Getty Images People wait in line to attend the bail hearing of Huawei Technologies Chief Financial Officer Meng Wanzhou in Vancouver.
Risk consultants and analysts said that the arrest could prompt Beijing to retaliate in some form.
Trump had met Xi at the weekend and agreed to a 90-day tariff truce in order to find a more permanent solution to the costly dispute, but messages since have been mixed, roiling global stock markets. These allegedly include forcing American and other foreign companies to hand over trade secrets in exchange for access to the Chinese market and engaging in cyber theft.
The arrest also stroked fears of a potential backlash on American companies operating in China.
Meng was arrested Saturday while in transit at Vancouver's airport.
Huawei has been a subject of United States national security concerns for years and Meng's case echoes well beyond tariffs or market access.
In a statement earlier this week, Huawei said the company complies with all laws and regulations in the countries where it operates, including applicable export control, sanction laws and regulations of the United Nations, the United States and the European Union.
"You can trust her", he said.