The CFO's arrest could be regarded back home as an attack on China's foremost corporate champions.
Canada on Saturday arrested Meng Wanzhou, Huawei's global chief financial officer, in Vancouver, where she is facing extradition to the USA on suspicion she violated US sanctions against Iran, the Globe and Mail newspaper reported on Wednesday.
Jia Wenshan, a professor at Chapman University in California, said the arrest "runs a huge risk of derailing the U.S". If Meng has been arrested for violating these restrictions, then this would mark the start of another significant technology export regulation case for the US.
President Donald Trump restored access after ZTE agreed to pay a $1 billion fine, replace its executive team and embed a USA -chosen compliance team in the company.
"The timing and manner of this is shocking", Andrew Gilholm, director of North Asia analysis at Control Risks Group, said by phone. The exact circumstances of her arrest were unclear. It should increase interaction with the USA and exert pressure when necessary.
Tech stocks were among those bearing the brunt of the selling on Thursday. -Chinese cease-fire in a tariff war over Beijing's technology policy.More news: Congress Poised To Punt On Government Spending Fight Over Border Wall
"Already anxious about the economic effects of trade wars, investors are now concerned that this will move beyond the realms of tariffs and into much broader economic and diplomatic conflict, with dire implications for global economic growth". In October, the USA said Belgium extradited a Chinese intelligence official accused of stealing trade secrets from US companies - an unprecedented development.
The arrest and any potential sanctions on the world's second biggest smartphone maker could have major repercussions on the global technology supply chain.
"If I was an American tech executive, I wouldn't travel to China this week", warned Lewis, who labeled Huawei "one of the Chinese government's pet companies" and charged the communist country's leaders wouldn't be afraid to "take hostages".
On Wednesday, Beijing's choice of representative at the funeral of former USA president George H.W. Bush in Washington also reflected those tensions.
Stock markets tumbled on the news, fearing renewed U.S.
"While Huawei and the Chinese government will say that there's no ties between the two, and they've really repeated that over and over again".More news: USA urges Europe to sanction Iran over missiles
Foreign ministry spokesman Geng Shuang told reporters Thursday that the Chinese government also wants Canadian officials to reveal the reasoning behind Meng Wanzhou's arrest Saturday.
Perhaps no company better personifies the perceived trade threat than Huawei.
Despite being essentially barred from the critical United States market, Huawei surpassed Apple to become the world's number two smartphone maker in the second quarter of this year and has market leader Samsung in its sights. -Broadcom Inc. merger that would've been the largest deal ever, saying it would hand the lead in 5G to China. Such a case is much harder to prove than "if they just wanted to cut Huawei out of the market", he said. While the company has made advances in developing its own microchips, it still relies on American equipment to make its networking gear and smartphones.
Huawei's biggest Chinese rival, ZTE Corp., was almost driven out of business this year when Washington barred it from buying USA technology over exports to North Korea and Iran. Its massive push into future mobile communications has raised hackles in the US and become a focal point for American attempts to contain China's ascendance.
Suspicions over Huawei's links to the Chinese government have made the company a target for suspicion and the United States has led the charge to ban its products and services.
"The rapidly dwindling good-feeling towards the USA and China's vague trade war ceasefire turned actively hostile on Thursday, investors fearing that, 90-day truce or not, the relationship between the two superpowers might be about to take a turn for the worse", he wrote. "Negotiations are the wish of Trump and Wall Street".More news: Donald Trump Has "Puzzled and Irritated" China on Trade, Report Claims