Posts Tagged ‘Huawei’

Asian markets sink as profit-takers move in, pound resilient

December 14, 2018

“Persistent uncertainties relating to geopolitical factors, the threat of protectionism, vulnerabilities in emerging markets and financial market volatility”.

Asian markets fell on Friday, putting the region on course to end a broadly positive week on a sour note, as traders took a step back and their profits off the table.

There was also some unease after the head of the European Central Bank raised concerns about the growth outlook for the eurozone owing to issues within and outside the bloc.

The pound showed some resilience, even as European leaders refused pleas for help from Prime Minister Theresa May to push their Brexit deal through a fractured British parliament.

Signs of easing tensions in the China-US trade row helped propel equities this week, with both sides seeming to give key concessions, fuelling hopes they can eventually resolve their differences.

Equity markets have gone into reverse after a broadly positive week

Equity markets have gone into reverse after a broadly positive week Equity markets have gone into reverse after a broadly positive week AFP

But observers noted that dealers will remain on alert for any negative news, including further developments in China’s detention of two Canadians on suspicion of threats to national security.

That move came after a top executive at Chinese telecoms giant Huawei was arrested in Ottawa. She faces extradition to the US over allegations the firm broke sanctions on Iran.

In early trade Hong Kong fell 1.6 percent and Shanghai was down 0.4 percent.

Tokyo finished the morning 1.7 percent lower. A survey of confidence among Japan’s big businesses showed they remain cautious, with worries about the global outlook offsetting fading concerns about the impact of this year’s major earthquakes and typhoons.

Sydney fell 1.2 percent, Singapore was 1.3 percent off and Seoul shed 1.5 percent while Taipei was also more than one percent lower. Wellington, Manila and Jakarta were also down.

On currency markets the pound was holding its own — maintaining gains won after May’s no-confidence vote win — despite the growing prospects of Britain leaving the EU without a deal.

With her agreement having no chance of passing through parliament in its present form, the PM called on her EU counterparts in a Brussels summit to give her some leeway that could get her majority support.

But she has so far failed to win any concessions on the main sticking point over Northern Ireland’s future relationship.

The euro continued to struggle after being sold Thursday in reaction to ECB boss Mario Draghi’s assessment that there were increasing risks to the eurozone.

After announcing the end to years of bond-buying stimulus, Draghi warned of “persistent uncertainties relating to geopolitical factors, the threat of protectionism, vulnerabilities in emerging markets and financial market volatility”.

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: DOWN 1.7 percent at 21,439.16 (break)

Hong Kong – Hang Seng: DOWN 1.6 percent at 26,111.39

Shanghai – Composite: DOWN 0.4 percent at 2,622.85

Pound/dollar: DOWN at $1.2633 from $1.2660 at 2130 GMT

Euro/dollar: DOWN at $1.1360 from $1.1361

Dollar/yen: DOWN at 113.46 yen from 113.61 yen

Oil – West Texas Intermediate DOWN eight cents at $52.50

Oil – Brent Crude: DOWN 26 cents at $61.19 per barrel

New York – Dow: UP 0.3 percent at 24,597.38 (close)

London – FTSE 100: FLAT at 6,877.50 points (close)



Apple to build $1 bln campus in Texas

December 13, 2018

Apple announced Thursday it will build a $1 billion campus in Texas as part of a nationwide expansion.

The facility will be less than a mile from the tech giant’s existing facility in Austin and initially accommodate 5,000 additional employees, with room to grow to 15,000.

As it stands, 6,200 people now work for Apple in the Texan capital — the largest cluster outside its headquarters in Cupertino, California.

Apple will spend $1 billion on its new Texan campus

Apple will spend $1 billion on its new Texan campus Apple will spend $1 billion on its new Texan campus AFP/File

Employees at the new campus will work in fields including engineering, R&D, operations, finance, sales and customer support, Apple said in a statement.

“Apple is proud to bring new investment, jobs and opportunity to cities across the United States and to significantly deepen our quarter-century partnership with the city and people of Austin,” Apple CEO Tim Cook said.

“Talent, creativity and tomorrow?s breakthrough ideas aren’t limited by region or zip code, and, with this new expansion, we?re redoubling our commitment to cultivating the high-tech sector and workforce nationwide.”

Apple also said it plans to boost its employee base in regions across the United States over the next three years.

It will expand to over 1,000 employees each at new sites in Seattle, San Diego and Culver City, California, and add hundreds of jobs in Pittsburgh, New York, Boulder, Colorado, Boston and Portland.

Apple said it plans to invest $10 billion in US data centers over the next five years, including $4.5 billion this year and next.

Earlier this month online retail giant Amazon also announced a major expansion, saying it will build a new headquarters divided between Long Island City in New York and Crystal City, across the Potomac River from Washington, DC. It says this $5 billion investment will create 50,000 jobs.



See also:

Apple to Build New Campus in Austin


Apple CEO Tim Cook calls for Bloomberg to retract Chinese spy chip report


Apple Reportedly Weighing Move Away from Manufacturing in China Due to Tariffs

Apple to invest $1 billion in new Texas campus — added 6,000 jobs to its U.S workforce in 2018

December 13, 2018

  • Apple will invest $1 billion in a new campus in Austin, Texas, the company announced on Thursday.
  • The 133-acre campus will be located in North Austin and will accommodate an initial 5,000 employees, with capacity for 15,000 employees in total.
  • Apple also announced plans to open new sites in Seattle, San Diego and Culver City, California over the next three years.
  • Apple Reportedly Weighing Move Away from Manufacturing in China Due to Tariffs
Image result for tim cook, photos

Apple will invest $1 billion in a new campus in Austin, Texas, the company announced on Thursday.

The 133-acre campus will be located in North Austin and will accommodate an initial 5,000 employees, with capacity for 15,000 employees in total. The new campus will be located less than one mile from Apple’s existing Austin facilities and will house a range of jobs in engineering, R&D, operations, finance, sales and customer support.

Apple said the expansion will make it the largest private employer in Austin.

Image result for apple, china, pictures

“Apple is proud to bring new investment, jobs and opportunity to cities across the United States and to significantly deepen our quarter-century partnership with the city and people of Austin,” Apple CEO Tim Cook said in a press release.

Texas Governor Greg Abbott said in a statement Apple’s decision to expand in Texas “is a testament to the high-quality workforce and unmatched economic environment that Texas offers.”

On Thursday, Apple also announced plans to open new sites and add over 1,000 employees in Seattle, San Diego and Culver City over the next three years. It said it will also expand its existing operations in Pittsburgh, New York, Boulder, Boston and Portland, Oregon.

Apple also announced that it has added 6,000 jobs to its U.S workforce in 2018 and is on track to create 20,000 jobs across the country by 2023.

Image result for apple, china, pictures

Apple plans to invest $10 billion in U.S. data centers over the next five years, including $4.5 billion this year and next. On Thursday, the company said its newest data center would be located in Waukee, Iowa. It is also expanding its data centers in North Carolina, Arizona and Nevada.

President Donald Trump has attacked Apple for producing many of its devices outside of the United States. In September, he warned Apple it could face more tariffs, ordering the company to “make your products in the United States instead of China.”

Donald J. Trump


Apple prices may increase because of the massive Tariffs we may be imposing on China – but there is an easy solution where there would be ZERO tax, and indeed a tax incentive. Make your products in the United States instead of China. Start building new plants now. Exciting!

55.3K people are talking about this

Apple shares have been under pressure in recent months amid worries about demand for its new iPhones. The tech titan has also been in the crosshairs of the trade war between the U.S. and China. President Trump threatened to place a 10 percent tariff on iPhones and laptops made in China last month. Apple’s stock has tumbled more than 20 percent over the past three months.


See also:

Apple to Build New Campus in Austin


Apple CEO Tim Cook calls for Bloomberg to retract Chinese spy chip report


Apple Reportedly Weighing Move Away from Manufacturing in China Due to Tariffs

Huawei Freezes Orders From Japan Supplier — “Huawei is turned upside down internally”

December 13, 2018

Related image

Yaskawa Electric Corp., which supplies industrial robots for Huawei’s smartphone and telecom gear factories, saw all orders for its machines put on hold after the arrest, President Hiroshi Ogasawara said in an interview on Wednesday. Of Yaskawa’s 448.5 billion yen ($4 billion) in revenue for the fiscal year that ended in February, 23 percent came from China.

“My people on the ground in China say that Huawei is turned upside down internally,” Ogasawara said. “All kinds of capex deals are temporarily on hold as they figure things out.”

Hiroshi Ogasawara Photographer: Akio Kon/Bloomberg

Huawei declined to comment. Yaskawa’s stock erased earlier gains in Tokyo trading, falling as much as 4 percent. Shares of other factory automation companies Fanuc Corp., SMC Corp. and Nabtesco Corp. have also paired gains.

Meng Wanzhou was arrested in Vancouver at the request of U.S. authorities for allegedly violating sanctions related to selling technology to Iran. While her detention has become an international incident, this is the first indication that it is beginning to affect Huawei’s operations. The arrest has further undermined the international standing of the company, which was already under suspicion in the West because of its ties to the Chinese government.

Separately, the Japanese media reported earlier this week that the country’s top three carriers — NTT Docomo Inc., SoftBank Group Corp. and KDDI Corp. — will ban telecommunications equipment by Huawei and ZTE Corp. France’s Orange SA said it does not plan to work with Huawei to build its fifth-generation mobile network.

Meng Wanzhou leaves her home under the supervision of security on Dec. 12.

Photographer: Ben Nelms/Bloomberg

The order freeze is making Yaskawa reconsider its outlook on the timing of demand for 5G phones and communications equipment, because Huawei was at the forefront of the technology’s rollout, Ogasawara said.

Image result for Huawei, 5G, pictures

Key Insights

  • Yaskawa said in October it expects memory chip manufacturers to start making capital investments related to 5G in the spring and see a boost in its own machinery orders by early next year. That outlook is now uncertain because of the events at Huawei, Ogasawara said.
  • The Huawei incident and trade tensions with U.S. are not likely to derail 5G’s rollout in China, he said. The deployment is driven by China’s national policy and orders for internal demand will make up for any losses due to trade barriers, he said.
  • Yaskawa has three factories in China, all of which make machines for domestic customers.
  • Global smartphone output is not likely to decline, but capital investment is likely to remain flat until 5G demand kicks in second half of 2019, Ogasawara said.

— With assistance by Yuan Gao

Trump sets ‘terrible precedent’ by crossing red line on Huawei case

December 13, 2018

The President’s remark is “extremely disturbing” — Crossing the red line of the rule of law.

China will see the arrest as “a plot to gain leverage in the [trade] negotiations, a plot to embarrass China, a plot to go after Huawei — any number of plots, pick your plot.”


President Donald Trump’s suggestion that he might use an arrested Chinese tech executive as a bargaining chip in trade talks with Beijing drew rebukes for setting a “terrible precedent” crossing the red line that separates American politics from the rule of law.


The remark triggered pushback from law enforcement officials, criticism from lawmakers and concern from legal and business analysts who said it’s not only a weak bargaining move that might create more friction with allies, but it represents a “poisonous” precedent that could eventually undermine the safety of Americans overseas.

Image result for Donald Trump, Pictures

“The US, like Canada, we’re both rule of law countries based on a constitution, legal principles, rule of law,” said William Reinsch, the Scholl chair for international business at the Center for Strategic and International Studies. “Our history is that things like this proceed through the criminal justice system and justice is blind. Trump is basically saying he might interfere with this process, which is a terrible precedent.”


In an interview with Reuters Tuesday, Trump said he would intervene in the case against Meng Wanzhou if it proved beneficial in securing a trade deal that has splintered relations between the two countries in recent months.
The CFO of Chinese tech giant Huawei was arrested December 1 in Vancouver for violating US sanctions on Iran — the same night Trump was dining with Chinese President Xi Jinping during the G20 summit in Argentina.

‘I would certainly intervene’


“Whatever’s good for this country, I would do,” Trump told Reuters. “If I think it’s good for what will be certainly the largest trade deal ever made — which is a very important thing — what’s good for national security, I would certainly intervene if I thought it was necessary.”

The Huawei Case Just Got (More) Political

Huawei’s Meng Wanzhou on her way home after bail hearing (Screenshot)
While Trump’s assertion to Reuters violates a basic American tenet, Reinsch notes that, “on the other hand, this is exactly the kind of thing China understands … because China isn’t a rule of law country and that’s what they would do.”
There are also the unintended consequences to worry about, said Michael Zeldin, a CNN legal analyst and former global leader of the anti-money laundering/terrorist financing and economic and trade sanctions practice at Deloitte Touche Tohmatsu in Washington.
“The danger is the unintended consequence of an American citizen abroad being arrested and held hostage to the arresting state’s economic, trade desires,” Zeldin told CNN. “But now we’ve set the appropriateness of Americans abroad being held hostage to trade deals. There’s too much danger in that,” Zeldin added. “If I was counseling the President I would say those two things should not be coupled.”
Image result for Michael Zeldin photos
Michael Zeldin
If Trump were able to follow through on his impulse, it could also create more friction with Canada, Reinsch said. “It seems to me to be an odd thing to say at this point in the process,” he said. “She’s not in US jurisdiction. She’s in Canadian jurisdiction. Intervening in the process means he would talk to [Canadian Prime Minister Justin] Trudeau, who has said more than once the normal judicial process will go ahead. It just creates another point of friction with Canada.”
Canada’s Foreign Affairs Minister Chrystia Freeland told reporters Wednesday that she has spoken with Secretary of State Mike Pompeo about Meng’s case. When asked about Trump’s comments, Freeland said Canada is not responsible for the behavior of other countries. “Canada will very faithfully follow the rule of law,” she said.

‘Let them grovel’


While Reinsch is adamant that Trump’s suggestion is not “the way we should be behaving,” he said that if Trump went ahead, it would be “a tactical mistake.”
“If you’re going to do it, the way to do it is make the Chinese come to us,” Reinsch said. “Let them grovel for a bit and then respond. You don’t give them what they want up front. What do we get if he does that? Nothing.”
At a Senate Judiciary Committee hearing Wednesday, top national security, counterintelligence and cybersecurity officials testifying on Chinese espionage threats also pushed back on Trump’s comments.
“What I do, what we do at the Justice Department, is law enforcement. We don’t do trade,” Assistant Attorney General John Demers, the department’s top national security official, said at when asked about the remarks.
“We follow the facts and we vindicate violations of US law. That’s what we’re doing when we bring those cases, and I think it’s very important for other countries to understand that we are not a tool of trade when we bring the cases,” he added.
Sen. Richard Blumenthal, the Connecticut Democrat who had asked the officials for their take on the President’s comments, said he felt “the danger of the President’s statement is that it makes it look like law enforcement is a tool of either trade or political or diplomatic ends of this country.”

‘Not in this one’


“That may be true in other countries,” Blumenthal said, “but not in this one.” The President’s remark was “extremely disturbing to me,” he said.
Image result for Richard Blumenthal, photos
Richard Blumenthal
“It seems to me,” the senator added, “that the President does a disservice to the work as well as the image of our nation in terms of law enforcement.”
Demers told the committee that if Meng is extradited from Canada, as the US has requested, “our criminal case will continue,” he said. He declined to comment further on the case.
Bill Priestap, the FBI assistant director in charge of the counterintelligence division, simply said the FBI would simply follow the motto “do your job.”
“From the FBI’s end, we’re going to continue to do our job,” he said.
Meng was arrested earlier this month at an airport in Vancouver, Canada, at the request of the US government, authorities have said.
The Chinese executive is accused of helping Huawei get around US sanctions on Iran by telling financial institutions such as HSBC that a Huawei subsidiary, Skycom, was a separate and unaffiliated company.
On Tuesday, Meng stepped out of detention after 10 days behind bars when a judge in Canada approved her release on $10 million Canadian bail ($7.5 million US).
Officials in China, where the judicial system is subordinate to the Communist Party, will have a hard time believing Meng’s arrest was due to the wheels of justice turning at their own pace, Reinsch said.
“They’ll believe it has nothing do with a judge in” New York who issued the warrant for her arrest in August, he said.
Instead, said Reinsch, a former president of the National Foreign Trade Council with long experience on US-China ties, the Chinese will see the arrest as “a plot to gain leverage in the [trade] negotiations, a plot to embarrass China, a plot to go after Huawei — any number of plots, pick your plot.”
That highlights another problem with Trump’s remarks, Reinsch said. “It will be seen as validation of what they already think, that we’re not a rule of law country,” he said. “That’s what makes it so poisonous, that they’ll think we’re just like them and we’re not.”
CORRECTION: The spelling of Meng Wanzhou’s name has been corrected.



Huawei arrest perceived as a “political kidnapping” in China

December 13, 2018


South China Morning Post

  • Foreign business executives face greater risks as US decides to target individuals in corporate misconduct cases
  • Donald Trump says he may intervene in the case, feeding into a popular belief in China that Meng’s arrest was a ‘political kidnapping’ for trade war leverage
  • US Deputy Attorney General Rod Rosenstein said in a speech on November 29 that under the revised Foreign Corrupt Practices Act, “pursuing individuals responsible for wrongdoing will be a top priority in every corporate investigation”
Image result for Huawei, logo, pictures
PUBLISHED : Thursday, 13 December, 2018, 5:01am
UPDATED : Thursday, 13 December, 2018, 1:15pm

The Huawei Case Just Got (More) Political

The Huawei Case Just Got (More) Political
The arrest of a former Canadian diplomat in China and unexpected comments from President Trump raise a fresh question about the case of Huawei’s Meng Wanzhou, who has now been released on bail: How political is it? Photo: Associated Press

The arrest of Huawei Chief Financial Officer Sabrina Meng Wanzhou is an early indication of the risks now facing foreign business executives, as American law enforcers start targeting individuals at companies that breach sanctions.

The controversy is increasingly being perceived as a “political kidnapping” in China, after US President Donald Trump suggested that he would intervene in the case as a means of gaining leverage in the trade war. For foreign corporate executives that facilitate trade with blacklisted countries, it may be a sign of things to come.

Against a backdrop of growing rivalry between Beijing and Washington, the case has infuriated the Chinese government and frayed China’s ties with Canada. It came as a result of a shift in focus by the US Department of Justice, which is centring corporate investigations on individual executives working at companies that break US laws.

Meng was arrested on fraud charges in Canada on December 1 upon the request of a district New York court, in relation to Huawei’s alleged violation of US sanctions on Iran. She has been granted US$7.5 million bail.

US Deputy Attorney General Rod Rosenstein said in a speech on November 29 that under the revised Foreign Corrupt Practices Act, “pursuing individuals responsible for wrongdoing will be a top priority in every corporate investigation”.

“The most effective deterrent to corporate criminal misconduct is identifying and punishing the people who committed the crimes. So we revised our policy to make clear that … a corporate resolution should not protect individuals from criminal liability,” read the transcript of Rosenstein’s speech.

Rosenstein said that the US Department of Justice has charged more than 30 individuals and convicted 19 in the past year, after a review of policy concerning individual accountability in corporate cases.

Previously, the US targeted the companies that breached sanctions, doling out mammoth fines to a series of international banks. However, the US targeting foreign nationals in its “long arm” law enforcement could bring fresh risks, analysts said.

Jeffrey Sachs, a professor at Columbia University and the author of A New Foreign Policy: Beyond American Exceptionalism, wrote in an opinion piece for Project Syndicate on Tuesday that, while executives should be held accountable for corporate misconduct, “to start this practice with a leading Chinese business-person, rather than the dozens of culpable US CEOs and CFOs, is a stunning provocation to the Chinese government, business community, and public”.

Sachs wrote that many banks, including US banks such as JP Morgan Chase, have violated US sanctions on Iran, but none of the CEOs or CFOs were put behind bars.

“One can say, without exaggeration, that this [arrest of Meng] is part of an economic war on China, and a reckless one at that”, he wrote.

Trump said in an exclusive interview with Reuters on Tuesday that he is open to using the case to help close a trade deal with Beijing, or for leverage in other American national security interests.

“If I think it’s good for the country, if I think it’s good for what will be certainly the largest trade deal ever made – which is a very important thing – what’s good for national security – I would certainly intervene if I thought it was necessary,” Trump told Reuters in the Oval Office.

Trump added that Chinese President Xi Jinping had not called him about the case, but said the White House had been in touch with both the Justice Department and Chinese officials over the arrest of Meng, a daughter of Huawei founder Ren Zhengfei.

This courtroom sketch shows Meng (right) in court in Vancouver. Image: Jane Wolsak via AFP

Mei Xinyu, a researcher at the Chinese Academy of International Trade and Economic Cooperation, a state-owned think tank affiliated with the Ministry of Commerce, said that Trump’s comments could be read as an “indirect confession” of kidnapping Meng.

“Isn’t this a self confession that he [Trump] had directed the kidnapping and now is blackmailing a ransom [from China]?” Mei wrote in a brief note.

Meng’s arrest in Canada has infuriated Beijing. She was apprehended while changing planes en route to Mexico from Hong Kong, after an arrest warrant was issued by the US for the alleged sanctions violations.

The Chinese foreign ministry has summoned the Canadian and US ambassadors to lodge a “strong protest” against the arrest and has demanded that Canada release Meng or face “grave consequences”.

China’s state media and researchers have widely depicted the case as a conspiracy by Washington to undermine the development of Huawei’s 5G technology, and to broadly thwart China’s rise.

“Washington should not attempt to use its domestic laws as strategic support for its commercial and diplomatic competition around the world. There is no doubt that the US actions are political, as the thin veneer of justice cannot conceal the political motives,” Chinese state-backed tabloid Global Times argued in an editorial on Tuesday.

US Attorney for the Eastern District of New York Richard P. Donoghue (centre) is trying to get Meng extradited from Canada to America. Photo: Getty Images via AFP

When Meng was released on bail on Tuesday, she was ordered to wear a GPS ankle bracelet, submit to the 24-hour supervision of a private security firm, and surrender her Hong Kong and Chinese passports.

She will live in a Vancouver home she owns with her husband. Meng has been told to return to court on February 6 to set a date for her extradition hearing.

The US is seeking her extradition on fraud charges related to alleged breaches of US and EU sanctions on Iran. Huawei has denied the charges.

“Huawei complies with all applicable laws and regulations in the countries and regions where we operate, including export control and sanction laws of the UN, US, and EU,” the company said in a statement after Meng was released.

See also:

Canadian Michael Spavor Questioned in China Following Detention of Ex-Diplomat

Michael Spavor: Second Canadian ‘missing’ in China — China now confirms he is being questioned

December 13, 2018

Canada’s foreign ministry says it is trying to make contact with a second Canadian who is believed to have been detained in China.

Michael Spavor, a businessman based in Dandong near the North Korean border, had contacted Canadian officials this week to say he was being questioned.

Foreign ministry spokesman Guillaume Bérubé said Canada was working hard to determine Mr Spavor’s whereabouts.

It comes after former diplomat Michael Kovrig was arrested in China this week.

Michael Spavor (L) in North Korea with former NBA star Dennis Rodman (right) (3 Sept 2013)
Michael Spavor (left) helped arrange ex-NBA star Dennis Rodman’s trip to North Korea in 2013. AFP photo


Canadian officials say the reason for Mr Kovrig’s detention remains unclear

But Chinese state media have reported that Mr Kovrig is being held “on suspicion of engaging in activities that harm China’s state security”.

Mr Kovrig currently works for a think thank, the International Crisis Group (ICG), which has said it is concerned for his health and safety.

At a news conference in Ottawa on Wednesday, Foreign Minister Chrystia Freeland said Mr Kovrig’s case had been raised directly with Chinese officials.

Michael Kovrig
Michael Kovrig was working for a think tank that focuses on conflict reduction research. AFP photo

She also said a second Canadian had contacted them earlier in the week because “he was being asked questions by Chinese authorities”.

She did not name the individual, saying it was “delicate situation” and she wanted to respect his privacy.

But Mr Bérubé later named the man in a statement as Mr Spavor and said he was “presently missing in China”.

China state media confirmed on Thursday that, as with the previous arrest, Mr Spavor was under investigation on suspicion of “engaging in activities that endanger China’s national security”.

Mr Spavor runs an organisation called Paektu Cultural Exchange, which organises business, culture and tourism trips to North Korea.

Michael Spavor with North Korean leader Kim Jong-un (2013)
Mr Spavor met North Korea’s Kim Jong-un during his 2013 visit to Pyongyang. AFP

He is a regular visitor to North Korea and regularly comments in the media on Korean issues. He is particularly well known for helping to arrange the visit by former NBA star Dennis Rodman to North Korea in 2013.

Rodman is a personal friend of North Korean leader Kim Jong-un.

His last tweet, on Sunday, said he was about to travel to Seoul in South Korea, but he did not arrive on Monday as planned.

The detentions have come after Canada arrested Chinese telecoms executive Meng Wanzhou last week.

Ms Meng is the chief financial officer of Huawei, one of China’s biggest telecoms companies, and the daughter of its founder.

She was arrested at the request of the US and is accused of violating sanctions on Iran. She was granted bail on Tuesday for C$10m (£6m; $7.4m) bail but could be extradited to the US.

China has demanded that Canada release Ms Meng, and has threatened unspecific consequences.

Canada has said there is currently no “explicit indication” of any link between her arrest and Mr Kovrig’s detention.

See also:

Canadian Michael Spavor Questioned in China Following Detention of Ex-Diplomat


China confirms second Canadian Michael Spavor under investigation for allegedly endangering national security

China suspected in huge Marriott data breach — global espionage effort

December 13, 2018

Investigators believe hackers working on behalf of China’s main intelligence agency are responsible for a massive data breach involving the theft of personal information from as many as 500 million guests of the Marriott hotel chain, a US official said Tuesday.

Investigators suspect the hackers were working on behalf of the Chinese Ministry of State Security, an official briefed on the investigation told The Associated Press.

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The official, who was not authorized to discuss the matter publicly and spoke to the AP on condition of anonymity, said investigators were particularly concerned about the data breach in part because Marriott is frequently used by the military and government agencies.

Marriott, which announced the data breach on Nov. 30, has not disclosed what it knows about the source of the hack, which included the theft of credit card and passport numbers over four years from guests who stayed at hotels previously operated by Starwood.

Marriott acquired Starwood, which includes such brands as Sheraton, W Hotels and St. Regis, in 2016.

“Our primary objectives in this investigation are figuring out what occurred and how we can best help our guests,” Marriott spokeswoman Connie Kim said. “We have no information about the cause of this incident, and we have not speculated about the identity of the attacker.”

The revelation of suspected involvement by China comes amid heightened tension with the US over trade; the arrest in Canada on an American warrant of a top executive of Chinese electronics giant Huawei; and alarm among law enforcement officials about Chinese efforts to steal technology to bolster its growing economy.

President Donald Trump said he would get involved in the Huawei case if it would help produce a trade agreement with China, telling Reuters in an interview Tuesday that he would “intervene if I thought it was necessary.”

Officials from the Justice Department, the FBI and the Department of Homeland Security told the Senate Judiciary Committee on Tuesday that China is working to steal trade secrets and intellectual property from US companies in order to harm America’s economy and further its own development.

Chinese espionage efforts have become “the most severe counterintelligence threat facing our country today,” Bill Priestap, the assistant director of the FBI’s counterintelligence division, told the committee. “Every rock we turn over, every time we looked for it, it’s not only there, it’s worse than we anticipated.”

Priestap said federal officials have been trying to convey the extent of the threat to business leaders and others in government. “The bottom line is they will do anything they can to achieve their aims,” he said.

Cyber-security expert Jesse Varsalone, of University of Maryland University College, said the Marriott hack does have signs of a foreign intelligence agency involvement. They included its duration and the fact that the information stolen, including details about travel by individuals, would be valuable to foreign spies.

“It’s about intelligence, human intelligence,” he said. “To me, it seems focused on tracking certain people.”

Priscilla Moriuchi of Recorded Future, an East Asia specialist who left the National Security Agency last year after a 12-year career, cautioned that no one has put out any actual data or indicators showing Chinese state actor involvement in the Marriott intrusion.

In the last few months, the Justice Department has filed several charges against Chinese hackers and intelligence officials. A case filed in October marked the first time that a Chinese Ministry of State Security intelligence officer was extradited to the United States for trial.

Prosecutors allege the operative, Yanjun Xu, recruited employees of major aerospace companies, including GE Aviation, and attempted to persuade them to travel to China under the guise of giving a presentation at a university. He was charged with attempting to steal trade secrets from several American aviation and aerospace companies.

Such investigations can be time-consuming and difficult. The Justice Department is training prosecutors across the country to bring more of these cases, Assistant Attorney General John Demers told the Senate Judiciary Committee. “We cannot tolerate a nation that steals the fruit of our brainpower,” he said.

The Associated Press

Trade-Talk Progress Lifts U.S. Stocks

December 12, 2018

*Stock Futures Rise on WSJ Report That China Plans to Boost Access for Foreign Companies

*S&P Futures Up 1.3% Vs. 0.9%

*DJIA Futures Up 1.4% Vs. 0.9%

(This article will be updated)

Global stocks gained Wednesday on a fresh wave of trade optimism and climbing oil prices, shrugging off a leadership challenge against U.K. Prime Minister Theresa May.

U.S. futures put the S&P 500 and the Dow Jones Industrial Average on course to rise 1% at the open, with trade-sensitive stocks like Caterpillar and Cisco up 2% and 1.1% in premarket trade, respectively. Meanwhile rising oil prices helped push Exxon Mobil stock 2.1% higher ahead of the market open.

Brent crude oil prices rose 1.6% to $61.18 a barrel and West Texas Intermediate Futures were up 1.5% at $52.58 a barrel, after weekly American Petroleum Institute figures released Tuesday revealed a larger-than-expected fall in U.S. inventories.

Stocks in Europe built on Tuesday’s gains, with the pan-continental Stoxx Europe 600 index up 1.3% in afternoon trade, while the British pound edged up 0.7% but remained near its lowest level in 20 months.

Lawmakers in the U.K.’s ruling Conservative party initiated a no-confidence vote against Mrs. May. On Monday, she postponed a parliamentary vote on her Brexit bill, which prompted a new volley of criticism over her handling of the country’s exit from the European Union. The yield on U.K. 10-year government bonds was at 1.23%, up from 1.18% late Tuesday. Yields rise as prices fall.

Traders at the New York Stock Exchange on Tuesday.
Traders at the New York Stock Exchange on Tuesday. PHOTO: BRENDAN MCDERMID/REUTERS

Rises in European stocks echoed gains in Asia, where the Nikkei climbed 2.2% and Hong Kong’s Hang Seng Index rose 1.6% as signs of a further softening in trade tensions revived risk appetite. Benchmarks in Taiwan, South Korea and Singapore all increased more than 1%.

Details continued to emerge from the first trade talks between Washington and Beijing, with China agreeing to boost purchases of soybeans and other crops, and to reduce auto tariffs.

The warming in U.S.-China trade relations has prompted cautious optimism among some investors, said Viktor Hjort, global head of credit strategy at BNP Paribas.

“A resolution on global trade is one of the most important issues for markets going into 2019,” Mr. Hjort said. “The positive angle is that U.S. and Chinese negotiators appear to be making an effort, but I think at this point, any absence of bad news is good news.”

President Trump said in an interview with Reuters he would intervene in the Justice Department’s case against Huawei Chief Financial Officer Meng Wanzhou if it would help smooth a trade deal with China. Ms. Wanzhou was granted bail by a Canadian judge Tuesday, after her arrest last week sent shock-waves through global stocks.

Uncertainty around trade will remain elevated, though, with technological and intellectual property disputes between Washington and Beijing unlikely to die down despite more conciliatory rhetoric, said Ann-Katrin Petersen, investment strategist at Allianz Global Investors.

The Chinese yuan was last up 0.1% against the U.S. dollar. The WSJ Dollar Index, which measures the buck against a basket of other currencies, was up 0.2%, its five-day gains eroded to 0.4%.

U.S. investors were also keeping an eye out for inflation data, due out later in the day. It comes a day after producer price data, another gauge of inflation, signaled a third straight monthly rise. The numbers will be scrutinized in the context of next week’s Federal Reserve meeting, at which investors broadly expect Chairman Jerome Powell to raise interest rates.

CME Group data gave a 78.,4% probability that Mr. Powell will announce an interest-rate increase.

Market participants will closely monitor the no-confidence vote on U.K. Prime Minister Theresa May’s leadership later Wednesday, although British assets’ initial reaction to the announcement was muted. The U.K.’s FTSE 100 index was last up 1.3%, broadly in line with gains elsewhere in Europe, while the FTSE 250 was up 1.2%.

More volatility may be ahead for U.K. assets, though, with some analysts seeing the confidence vote as a binary event for sterling.

Wednesday’s vote is the latest in a series of developments that have prompted investors from outside the U.K. to limit their exposure to Brexit uncertainty in recent months, said Emmanuel Cau, head of European equity strategy at Barclays.

“Global investors have left the U.K. equities and FX markets and not many people have the ability to trade on what’s going to happen,” said Mr. Cau. “In this particular situation, nobody’s been able to make forecasts so they’ve stopped trying.”

A victory for Mrs. May could prompt a rally as large as 2% for the pound, while defeat would shave off another 3%, Nomura said in a note.

Elsewhere in Europe, investors monitored the reaction to French President Emmanuel Macron’s decision to cut taxes in the wake of protests. The move may test the EU’s budgetary rules and embolden other members, such as Italy, to do the same.

In commodities, gold was up 0.2% at $1,249.50 a troy ounce.

Write to David Hodari at

Huawei: Why the Chinese telecoms giant is in the cross hairs

December 12, 2018

Sabrina Meng Wanzhou, the 46-year old CFO of Chinese telecoms giant Huawei and daughter of its founder Ren Zhengfei, has been granted bail by a Canadian court, setting up a protracted legal fight over extradition to the United States.

Logo von Huawei (Reuters/H. Hanschke)

Meng was arrested in Vancouver earlier this month at the request of US authorities, who have accused her of fraudulently representing Huawei to get around US sanctions on Iran.

Her case has now become embroiled in the wider trade war between China and the US after US President Donald Trump suggested he may intervene if it would help secure a broad deal with Beijing. The arrest came the same day Trump and Chinese President Xi Jinping declared a 90-day truce in their trade war during summit talks in Buenos Aires.

By Meng Jing
South China Morning Post

Although Meng’s arrest prompted outrage in China, Beijing is walking a fine line between defending one of the crown jewels of the country’s tech industry and preventing a nationalist backlash that could derail a potential trade deal with Washington.

But what is Huawei and why is it so important to the future of relations between China and the US? Here is what you need to know.

 What is Huawei?

Established in 1987, Huawei is a Chinese tech champion that sells smartphones and telecoms equipment across the world. Headquartered in China’s southern coastal city of Shenzhen, Huawei is China’s top smartphone maker, and overtook Apple as the second-largest smartphone vendor globally in the second quarter this year – a feat it also maintained in the third quarter, according to IDC data.

Perhaps more importantly, Huawei is now the world’s largest telecom equipment supplier and has a key role to play in China’s ambition to lead the way in next-generation mobile telecoms infrastructure – known as 5G. Competing with the likes of Ericsson and Nokia Oyi, Huawei was the only major equipment-maker to achieve an increase in market share in 2017.

Who created Huawei?

Huawei’s founder Ren Zhengfei is a noted figure in China’s business world and moves in the highest government circles. The 74-year-old self-made billionaire is the son of schoolteachers and grew up in a mountainous town in China’s poorest province, Guizhou. A survivor of China’s great famine between 1958 and 1961, Ren graduated from the Chongqing Institute of Civil Engineering and Architecture.

He worked in the civil engineering industry until 1974 when he joined the People’s Liberation Army as an engineer – a connection that still provokes questions in the West about Huawei’s ties to the Chinese army and government. Ren was an elected member of the 12th National Congress of the Communist Party of China.

Today Huawei does business in more than 170 countries and regions globally, has around 180,000 employees and a sales volume of over US$39 billion. The low profile Ren is ranked 83rd in Forbes’ China Rich list with a net worth of US$3.2 billion.

Who owns Huawei?

Unlike its Chinese rival ZTE Corp, which is a state-backed enterprise, Huawei is a private company collectively owned by its employees. Not being familiar with Western stock option systems, Huawei’s founder Ren Zhengfei says he designed an employee stock ownership plan at the inception of the company.

At a time when China was still struggling with the aftermath of the Cultural Revolution, being a private owner and hence open to being perceived as a capitalist – Ren felt that not owning the company was the least dangerous thing for a founder to do, according to a Harvard Business Review story which studied Huawei’s profit sharing model. Ren himself holds a 1.4 per cent stake in Huawei, according to the company’s 2017 annual report.

How did Huawei become successful?

The vast domestic market, the timing of overseas expansion and heavy investment in research and development have all been important positive factors for Huawei. But many analysts attribute the secret of its success to a unique company culture, sometimes dubbed “wolf-culture” for being fearless and aggressive. Workers have also been known to pass out on office mattresses from exhaustion. It has strong discipline and nobody – not even Ren – has their own driver or flies first class on the company dime.

Why and how was Meng arrested?

Meng was detained in Vancouver on December 1 at the request of US authorities. Meng was accused by the US of helping Huawei cover up violations of US sanctions on Iran, according to Canadian prosecutors. She is said to have told financial institutions that affiliate Skycom was a separate company in order to conduct business in the country, when in fact it was a Huawei subsidiary.

“Meng and other Huawei employees repeatedly lied about the nature of the relationship between Huawei and Skycom and the fact that Skycom operated as Huawei’s Iran-based affiliate in order to continue to obtain banking services,” the US authorities said in the arrest request delivered to Canadian authorities.

Meng has denied any wrongdoing and said in her personal affidavit for bail that she will contest the allegations if surrendered to the US.

Why is Huawei banned in the US and in some other markets?

The US government has for years seen Huawei as a national security threat due to fears about its association with China’s government, the Chinese Communist Party and its military. This has been of particular concern when it comes to networking gear and the possibility for breaches of data privacy.

In February, US intelligence officials warned Americans not to buy Huawei devices because they could be used to spy on users. The Chinese smartphone maker was supposed to enter the US via mobile network AT&T, but the deal fell through at the last minute.

The US in August enacted the National Defence Authorisation Act to ban the government’s use of Huawei and ZTE technology products and services on concerns over their connections with Chinese intelligence. US security experts have warned of a range of potential security risks, including but not limited to the capacity to control telecommunications infrastructure and even conduct undetected espionage.

Japan, a US ally, this week excluded Huawei and ZTE from public procurement, adding to the list of countries that have pushed back against the Chinese technology company on security issues. Australia and New Zealand have also effectively blocked Huawei from their roll-out of 5G network infrastructure, with the UK and Canada also weighing up the possible security risks posed by Huawei.

What has Huawei said in its defence?

Huawei has consistently denied any connections with the military, saying that it is a private company that is part-owned by its employees.

When Australia took the decision to block Huawei from its 5G infrastructure in August on national security grounds, Huawei said the decision was not aligned with the long-term interests of the Australian people, and denied Australian businesses and consumers the right to choose from the best communications technology available.

It has said all countries need to recognise the importance of setting better common standards, adopting ­industry best practice and implementing risk-mitigation procedures to ensure that there is an objective basis for choosing technology vendors.


(This will likely add to the perception of China as a nation that does not obey the rule of law, many in the U.S. say)


 — (Wang Yi hints that human rights laws are being violated)


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