Breaking Down the Diplomatic Breakdown Between The US, China, and Canada
Darryl Dyck/Bloomberg
For the past three years, Canada has been caught between two superpowers - China and the United States - and their jostling for supremacy in the case of Meng Wanzhou and the detention of the two Michaels. At the start of the case, very few people knew who Meng Wenzhou was, but over the last three years her story has gained international attention. During Meng’s house arrest, she lived close to Eric Hamber, bringing the international dispute very close to home.
Huawei and Meng Wanzhou
Meng was born in Chengdu, China. She is the eldest daughter of consumer-tech company Huawei’s founder, Ren Zhengfei. Meng attended Huazhong University of Science and Technology, and while attending she earned a master’s degree in accounting. After university Meng started as a secretary at the company and worked her way up the corporate ladder, eventually becoming Chief Financial Officer of China’s largest privately-held company.
The Case Against Meng Wanzhou
In December 2018, Meng was arrested at Vancouver International Airport at the request of the United States. Her detainment triggered an outpouring of criticism from China, where the majority of people saw her arrest as a hostage situation. Meng’s arrest was related to the extradition order from the United States. The United States was looking to extradite Meng on a fraud charge, contending that she lied to HSBC, a multinational investment bank, in business dealings that put the company at risk of breaching sanctions against Iran. The U.S. Department of Justice also accused Meng of misrepresenting Huawei’s relationship with Iranian telecom company Skycom in further dealings. US investigators claimed that Meng was attempting to get extra banking services. Iran is subject to U.S sanctions, which means that banks can be found criminally liable if they assist in moving money out of a sanctioned country and into world wide banking.
In the face of international pressure, Canada was keen to show the independence of its judicial system and Meng was placed under house arrest. During her house arrest, she was able to live in one of the two houses she owned in the Shaughnessy area and was permitted to travel around the city, wearing a GPS tracking ankle bracelet.
The Two Michael’s Detention
Following Meng’s arrest, China Michael Kovrig, a former diplomat, on December 10, 2018. He was an employee of the global think-tank International Crisis Group. Within days, China also arrested business consultant Michael Spavor, under suspicion of “engaging in activities that threatened China’s national security.”, according to Chinese foreign ministry spokesman Lu Kang. China repeatedly refused that the cases were connected to Meng’s, saying they are “entirely different in nature.” However, the arrests were seen by observers around the world as a form of retaliation for Meng’s detention.
Meng’s Release
On September 24, 2021, Meng accepted the charges for misleading HSBC in 2013 but did not plead guilty to the fraud charges. The agreement stated that she takes “responsibility for her principal role in perpetrating a scheme to defraud a global financial institution,” said acting U.S. Attorney for the Eastern District of New York Nicole Boeckmann.
Huawei was charged with misleading HSBC. Huawei went a different route than in the Meng case. As the charges against Huawei are different from Meng. They felt the case against the company would be complicated and difficult to resolve as they have other open cases. Huawei has had many different criminal investigations and has been charged by the U.S justice department 19 times, since 2007.
Meng boarded a flight from YVR to Shenzhen the afternoon she was released.
The Two Michael’s Release
Following Meng’s release, the Chinese government released the two Michaels. Huawei officials say the two Michaels’ release was not known to the company until Meng was on her way back to China from Vancouver. Any conversation of the two Michaels took place separately, and that in the 18 months of talks between the US Department of Justice and Huawei’s lawyers, it was not directly discussed. However, the political analysts in Canada do believe the cases were linked.
The Fallout
In the short-term, Canada has to decide whether to allow Huawei to provide 5G infrastructure equipment to the country. If Canada rejects Huawei, it is likely to inflame tensions between the two countries again. Canada will need to balance its relations between the two superpowers.
In the longer-term, the relationship between China and the US will continue to drive global international relations. Current problems with the supply chain of manufactured goods show how interlinked the world economy is. Given that the world is also facing a climate crisis and the two countries are the largest polluters, it is vital that both countries continue to co-operate and provide leadership.