Beijing Slams "Politically Motivated" Huawei Indictment

Since the US successfully convinced Canada to arrest Huawei CFO Meng Wanzhou, the daughter of the telecoms giant's founder, Commerce Secretary Wilbur Ross and other US officials have insisted that the Huawei issue is "separate" from trade talks with China. But it's becoming increasingly clear that that's not really the case, and that the Chinese certainly don't agree.

On Monday, the US filed a series of indictments against Huawei and Meng on allegations ranging from technology theft, to obstruction of justice to bank fraud, the latest step in the US's push to drive the telecoms giant and 5G leader out of Western markets - a campaign that has already yielded some success, given that New Zealand and Australia have already banned Huawei equipment and European countries including Germany and the Netherlands are considering similar steps.

Huawei

But in its response to the charges, which likely foreshadow an outright ban from US markets for Huawei and fellow Chinese telecoms giant ZTE, a spokesman in Beijing denied the charges against Huawei and blamed them on political motivations, the BBC reported. The denial from Beijing is ironic, considering that Huawei has countered accusations levied by the US that it cooperates with Chinese by insisting that it is independent from the state.

At a briefing in Beijing, government spokesperson Geng Shuang said there were "political motivations" behind US attempts to "smear and suppress certain Chinese companies."

"We urge them to treat Chinese enterprises in a fair and just way."

The spokesman added that allegations of technology theft had already been settled back in 2014 during a civil case brought by T-Mobile, which had accused Huawei engineers of stealing 'Tappy', a robot designed by the company to mimicked the movements of human fingers to test phones.

All told, the US laid out 23 charges against the company. During a press conference, FBI Director Wray said Huawei posed a dual threat against the US - both economic and national security-related.

In a statement from the company, Huawei said it was "disappointed to learn of the charges brought against the company today," and added that it didn't commit "any of the asserted violations" and that it "is not aware of any wrongdoing by Ms Meng."

Here's the full statement, courtesy of Bloomberg:

"Huawei is disappointed to learn of the charges brought against the company today. After Ms. Meng’s arrest, the Company sought an opportunity to discuss the Eastern District of New York investigation with the Justice Department, but the request was rejected without explanation. The allegations in the Western District of Washington trade secret indictment were already the subject of a civil suit that was settled by the parties after a Seattle jury found neither damages nor willful and malicious conduct on the trade secret claim. The Company denies that it or its subsidiary or affiliate have committed any of the asserted violations of U.S. law set forth in each of the indictments, is not aware of any wrongdoing by Ms. Meng, and believes the U.S. courts will ultimately reach the same conclusion."

Hu Xijin, the editor of the English-language Communist Party mouthpiece the Global Times insinuated that the US's crackdown on Huawei has been motivated by the inability of US companies' to compete with Huawei's 5G network technology...

...Prompting hedge fund investors and noted China bear Kyle Bass to chortle about GT's portrayal of China as a victim.

The charges against Huawei follow a series of indictments brought by the DOJ against alleged hackers and others accused of aiding Chinese intelligence services. Meanwhile, the US is expected to formally lodge an extradition request for Meng by the end of the month.

Meanwhile, Huawei’s CFO “should not be a hostage” in Sino-U.S. relations, her lawyer said on Tuesday, after the United States announced criminal charges against herself and the Chinese firm just days before crunch trade talks with Beijing.

Meng's lawyer Reid Weingarten, partner at Steptoe & Johnson, pointed to “complex” Sino-U.S. relations. "Our client, Sabrina Meng, should not be a pawn or a hostage in this relationship. Ms. Meng is an ethical and honorable businesswoman who has never spent a second of her life plotting to violate any U.S. law, including the Iranian sanctions."

Though IP theft is one of the main allegations against Huawei, and also represents one of the biggest sticking points in the ongoing trade spat with Beijing, we imagine that this won't in any way impact the "very, very important" trade talks taking place in Washington this week.