Posts Tagged ‘technology’

Huawei dominates high-level Australia-China talks led by Howard

December 8, 2018

The Huawei controversy dominated a high-level meeting in Beijing between Australia and China, in the wake of the dramatic arrest of Huawei executive heiress Meng Wanzhou.

Former Australian prime minister John Howard meets Chinese State Councilor Yang Jiechi at Zhongnanhai in Beijing.

 

Former Australian prime minister John Howard meets Chinese State Councilor Yang Jiechi at Zhongnanhai in Beijing. CREDIT:SANGHEE LIU

Former prime minister John Howard led the Australian delegation at annual talks and later met with China’s most senior diplomat, Politburo member Yang Jiechi, at the Zhongnanhai leader’s compound.

Yang, a top advisor on the United States and a friend of the Bush family, noted Howard had been the Australian prime minister for 11 years and said China remembered his “important contributions to bilateral ties”.

“The continued growth of Australia China relations requires joint efforts from both sides,” he said.

Prime minister Scott Morrison – the fifth prime minister in five years – is yet to visit Beijing, but has said he wanted to emulate Howard’s approach of working with both China and the United States.

Despite the sub-zero temperatures outside Zhongnanhai’s ancient Hall of Purple Light pagoda, the mood inside the room showed a sustaining thaw in bilateral relations.

Howard told Yang in front of media cameras there had been “some good debating tussles” earlier in the day.

It is understood the topic of Huawei was raised repeatedly during the meeting between the Australian and Chinese delegations, but not in the meeting with Yang.

Australia was the first member of the Five Eyes security alliance to ban Huawei from participating in its 5G network on national security grounds, after warnings from the US.

Huawei's chief financial officer Meng Wanzhou.
Huawei’s chief financial officer Meng Wanzhou.CREDIT:AP

Meng’s arrest a week ago in Canada under an extradition request by the United States for alleged Iran sanctions violations is being viewed by Chinese media as part of an effort to contain Huawei’s global growth.

But as the trade war between China and the US worsens, Beijing has shown a willingness to repair its relationship with Australia.

Foreign minister Marise Payne and trade minister Simon Birmingham last month broke a year-long diplomatic freeze imposed by Beijing on ministerial visits to China after falling out with the Turnbull government over foreign interference legislation.

“We were able to renew the strength of the relationship today,” said Howard, who noted he had visited Beijing frequently when he was prime minister.

Howard, whose former electorate of Bennelong has a large Chinese Australian population, pointed to 1.2 million Australians of Chinese heritage, and “Chinese influence in all of our cities”, as important to the relationship.

Exports to China had helped Australia escape the Global Financial Crisis relatively unscathed, he said, and the economic relationship had since broadened from minerals to services and education.

“The relationship is in good shape but like all close relationships you’ve got to keep your friendships in good repair,” he said.

The High Level Dialogue, held each year between retired officials, business, academic and cultural figures from each country, is a more candid forum to air grievances and sticking points in the relationship than meetings of government officials – of which there have been few this year.

The delegation to Beijing included former Labor foreign minister Stephen Smith, former competition tsar Alan Fels, Jason Yat-sen Li, Australia China Council chairman and ANZ executive Warwick Smith, National Museum of Australia director Matthew Trinca, the Lowy Institute’s Richard McGregor and Business Council chief executive Jennifer Westacott.

Yang greeted Smith saying: “We have met before and we cooperated a lot.”

Smith was the foreign minister in the Rudd Government and dealt with China during the crisis sparked by the arrest of Rio Tinto executive Stern Hu during an iron ore pricing war between Australia and China.

Some analysts have pointed to parallels between Hu’s jailing and the arrest of Meng.

https://www.smh.com.au/world/asia/huawei-dominates-high-level-australia-china-talks-led-by-howard-20181208-p50l00.html

 

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‘Read this quickly before it’s gone’: how China’s media covered or ignored the arrest of Huawei executive

December 7, 2018

Logo von Huawei (Reuters/H. Hanschke)

Canada’s Globe and Mail newspaper reported on Wednesday that Meng Wanzhou (孟晚舟), the daughter of the founder of Chinese telecoms giant Huawei, Ren Zhengfei (任正非), had been arrested in Canada and faces extradition to the United States on charges of violating US trade sanctions on Iran.

Meng is also the deputy chair of Huawei, which in recent months has faced an international backlash over concerns the company is linked to the Chinese state and poses a security risk.

Meng Wanzhou

Meng Wanzhou. File photo: Huawei.

Little information is available about Meng’s arrest, which reportedly occurred on December 1. Ian McLeod, a spokesman for Canada’s Justice Department, told the Globe and Mail: “As there is a publication ban in effect, we cannot provide any further detail at this time. The ban was sought by Ms Meng.”

So far, Chinese mainstream media have been largely silent on the case. A handful of media have picked up an early news release from the official China News Service that closely follows the press release from the Chinese Embassy in Canada.

That release registered a strong protest, saying that Meng’s arrest had “seriously harmed the human rights of the victim.”

The China Daily, published by the Information Office of the State Council, released an article in Chinese earlier today quoting the official release from Huawei saying that Meng has done nothing wrong and they are confident there will be a fair result.

Huawei Canada

Huawei, Canada. Photo: Wikicommons.

The official Xinhua News Agency did not release a report in English until around 5PM today Beijing time. That report again closely followed the remarks from the Chinese Embassy in Canada and the official Huawei release.

As of 8:30PM Beijing time there was still no Xinhua story in Chinese carried prominently on the service’s website, though far down the list of news was a transcript of the foreign ministry press conference.

Xinhua was focussed instead on Xi Jinping’s trip to Spain, Portugal and Latin America, and on the 40th anniversary of China’s “reform and opening” policy.

No doubt the timing of the Meng Wanzhou story, coming less than two weeks ahead of the formal anniversary on December 18, will also be a point of great sensitivity for the Party leadership.

Xinhua

Xinhua homepage, December 6 2018. Photo: Screenshot.

There were also stories on both the Chinese and English sides of Caixin. Interestingly, though, while the English report is prominent, the Chinese report was pushed lower down at around 4pm Beijing time, emphasising in the headline the fierce response from the Chinese Embassy in Canada — and two hours later that story was not visible at all on the Chinese homepage.

The English-language page at Caixin gave the Meng Wanzhou arrest story central play, and by 5pm Beijing time also paired it with the story of Huawei’s troubles in the UK.

The Chinese homepage of Caixin at around 4pm Beijing time on December 6 showed the Huawei story of the arrest of Meng Wanzhou well below other featured articles.

By 5pm Beijing time on the same day, no stories about Huawei or its CFO, Meng Wanzhou, were visible on the Chinese-language Caixin homepage.

Caixin

The English-language page at Caixin gives the Meng Wanzhou arrest story central play, and by 5PM Beijing time also pairs it with the story of Huawei’s troubles in the UK. Photo: Screenshot.

But lack of information on this breaking story, and relative silence from traditional and state-run media cannot forestall the conversation in China. There has been a flurry of chatter and speculation on Weibo and WeChat, although of course, that conversation is in a state of constant emergence and disappearance.

Here, courtesy of the Weiboscope, are a few of the more recent Weibo posts that have been removed, most dealing directly with the original report from the Globe and Mail:

  • 2018-12-06 13:29:55 | #ImmigrantObserver # MengWanzhou (Sabrina Wanzhou Meng) born 1972, is the daughter of Huawei founder and CEO Ren Zhengfei, and Meng Dongbo (孟东波), the father of her mother, Meng Jun (孟军), served as deputy governor of Sichuan province. She at the very least has Chinese, American and Canadian passports!
  • 2018-12-06 07:31:11 | [Meng Wanzhou, Daughter of Huawei CEO Ren Zhengfei, arrested in Canada] Canada’s Global and Mail newspaper reported that the daughter of Huawei CEO Ren Zhengfei, Huawei’s CFO Meng Wanzhou, has been arrested in Canada and faces extradition to the U.S. American law enforcement authorities have said that Meng Wanzhou is suspected of violating U.S. trade sanctions against Iran. http://t.cn/EyXG9Ao
  • 2018-12-06 07:24:50 | [Foreign Media: Ren Zhengfei’s daughter and Huawei CFO Meng Wanzhou has been arrested in Vancouver] News, Beijing time, December 6. According to Canada’s Globe and Mail, quoting Ian McLeod of Canada’s Justice Department, Canada has arrested Huawei CFO Meng Wanzhou. http://t.cn/EyXbNi9

Marco Rubio

@marcorubio

If @Huawei has been helping violate US sanctions by transferring US technology to they should be barred from operating in the US or from purchasing US technology.

488 people are talking about this

A Weibo search for “Meng Wanzhou” directs readers to two posts from state media, one from CCTV Online and the other from the Global Times. The CCTV post is a short video relaying the response from China’s Foreign Ministry, calling on Canada and the U.S. to immediate release Meng and to “protect the legitimate rights of the person involved.”

The Global Times post similarly focuses on what at present seems right now to be the core message of the leadership: Meng must be immediately released.

The battle by ordinary citizens and other non-official voices to have a say on the Meng case, over and against the official urge to control the development of the issue online, could be glimpsed openly on social media.

In a post made around 8:30pm to Weibo, Zhu Wei (朱伟), an entrepreneur with more than two million followers on the platform, posted the following message:

“This topic is so sensitive. The headline article on my WeChat public account ‘Teacher Zhu Wei’ (朱伟老师), ‘Chinese Embassy in Canada: We Demand the Immediate Return of Meng Wanzhou’s Freedom’ was deleted by the relevant departments. Right now I’m reposting it on Weibo, so read it really quickly before it’s gone.”

Huawei phone

Photo: Kārlis Dambrāns/Flickr.

In a Weibo post, entrepreneur Zhu Wei tells readers to quickly read his post already deleted from the WeChat platform — before it once again disappears.

The article in question by Zhu Wei, offered a rundown of the official statements from the foreign ministry and from Huawei, and then included a paragraph by paragraph translation of the original report from the Globe and Mail.

Another post from the Weibo account of the Putian Media Group (莆田广播电视台) offered readers a video from talk Meng Wanzhou gave in English on September 26 at the World Academic Summit in Singapore.

The post, which bore the hashtag “#MengWanZhouArrested,” noted that Meng’s talk had been about “how to promote industry innovation.” But the video was soon disabled, yielding the message: “We’re sorry, this video cannot be displayed. Please view another video.”

Some commenting on WeChat and other platforms voiced anger over Meng’s arrest, viewing it through the lens of US-China competition, as a provocative act and a sign that the United States and other Western countries want to keep China down, even stripping it of its “right to develop.”

Wechat

File photo: Sinchen.Lin/Flickr.

In a piece shared widely on WeChat, Mei Xinyu (梅新育), a financial writer with more than one million followers on Weibo, wrote:

“Finally, I want to emphasise again the assessment I had a few days ago: through equal and rational dialogue a new cold war between China and the US can be avoided, and this would be a great thing for both countries and for the world.

“But the sky rains when it wants to, and girls marry when the time comes, and if certain people insist on foisting a ‘new cold war’ upon us, China has sufficient courage to meet this challenge, upholding China’s right to development in the midst of this struggle.”

Republished with permission from the China Media Project. 

https://www.hongkongfp.com/2018/12/07/read-quickly-gone-chinas-media-covered-ignored-arrest-huawei-executive/

Big Brother Australia cracks open encrypted messaging

December 7, 2018

A new law will require tech firms to give security agencies access to their encrypted data, a provision experts expect other Western nations to soon replicate

 SYDNEY, DECEMBER 7, 2018 1:25 PM (UTC+8)
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New Australian legislation will require tech companies to open back doors to their encryption technologies. Photo: iStock

New Australian legislation will require tech companies to open back doors to their encryption technologies. Photo: iStock

US-China tensions, Huawei arrest played no part in death of renowned Stanford professor Zhang Shoucheng, family says

December 7, 2018

The family of Professor Zhang Shoucheng denied Chinese social media rumours that his death was due to US-China tensions or the arrest of Huawei’s CFO

The renowned physicist died Saturday after a long battle with depression

Image result for U.S., China, flags, pictures

South China Morning Post

Friday, December 7, 2018

The family of Stanford professor Zhang Shoucheng, a world-renowned physicist and venture capitalist, denied speculation on Chinese social media that his death was connected to current tensions in US-China relations or the arrest of Huawei’s CFO in Canada on Saturday.

Zhang, a tenured professor of physics at Stanford University, was internationally recognised for his work in quantum science. He was also the founding partner of Danhua Capital, a Silicon Valley-based venture capital fund investing primarily in early-stage technologies.

Zhang died on Saturday, December 1 following a battle with depression, according to his family. He was 55.

Many rumours circulated on Chinese social media about his sudden demise, some trying to build links between his death to a possible US government investigation under Section 301 of US trade law into Zhang’s Danhua capital and even stretching to connect it to the arrest of Huawei’s CFO Meng Wanzhou on the same day.

In a exclusive interview with the South China Morning Post, a representative of the family said “there is no truth to this uninformed speculation”.

”I would like to take the opportunity to refute speculation connecting Professor Zhang’s death and tensions in US-China relations or any other event. It is true Danhua was mentioned in a 301 report, but there was no investigation or any other activity as a result of this mention,” said the representative, who asked not to be identified.

In 2013, Zhang set up Danhua Capital, also known as Digital Horizon Capital, to focus on funding artificial intelligence, big data, robotics, and blockchain technology, among other things.

The California-based firm had raised capital of US$434.5 million in two funds, according to Crunchbase. Its major backers include the Zhongguancun Development Group, a Chinese state-owned company funded by the Beijing municipal government.

Danhua lists 113 US companies in its investment portfolio, most of which fall within emerging sectors such as biotech and artificial intelligence, which the US administration has identified as the Chinese government’s “strategic priorities”, according to a recent investigative report on China’s trade practises.

The representative from the family hoped “people will cease this unfounded and hurtful speculation. I mention this because the SCMP is a reputable newspaper and one people look to for authoritative accounts.”

The family appealed for the online rumours to stop. “The resulting misinformation only causes needless suffering for Professor Zhang’s family,” the representative said.

“While he was a public figure, beloved by his students and colleagues alike, the most appropriate way to honour his memory is to mourn his passing and to keep alive the special light of learning, research, and discovery that Professor Zhang brought while he was with us,” he added.

In an earlier email, Zhang’s family said that he had “passed away unexpectedly … after fighting a battle with depression”. They did not reveal the cause of death.

“As we face this devastating news, we are deeply grateful for the support and condolences that we have received,” they wrote. “We would ask, however, the public to respect our privacy as we grieve over this immense loss.”

Zhang was born in Shanghai in 1963 and attended the city’s Fudan University at the young age of 15. He went on to pursue a PhD in physics at the State University of New York at Stony Brook, where he trained under Nobel Physics Prize winner Yang Chen-ning.

Steven Kivelson, a fellow Stanford physics professor, described Zhang’s death as an “inconceivable loss”.

“Shoucheng has long been an intellectual leader in theoretical physics who is widely admired for his extraordinary creativity … as well as for his devotion to the many brilliant students and [post doctoral researchers] he has mentored,” he wrote in an email.

Zhang’s contribution to the quantum field earned the recognition of not only his peers but also of the Chinese government. In 2009, Zhang was hand-picked to be part of an expert panel for the state-run “Thousand Talents” programme that aims to attract overseas scientists.

https://www.scmp.com/news/china/society/article/2176803/us-china-tensions-played-no-part-death-renowned-stanford

Why Huawei arrest deepens conflict between US and China

December 7, 2018

“Who is going to be the world leader essentially.”

The dramatic arrest of a Chinese telecommunications executive has driven home why it will be so hard for the Trump administration to resolve its deepening conflict with China.

Image result for Huawei , Signage, photos

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In the short run, the arrest of Huawei’s chief financial officer heightened skepticism about the trade truce that Presidents Donald Trump and Xi Jinping reached last weekend in Buenos Aires, Argentina. On Thursday, US stock markets tumbled on fears that the 90-day cease-fire won’t last, before regaining most of their losses by the close of trading.

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But the case of an executive for a Chinese company that’s been a subject of US national security concerns carries echoes well beyond tariffs or market access. Washington and Beijing are locked in a clash over which of the world’s two largest economies will command economic and political dominance for decades to come.

In this undated photo released by Huawei, Huawei’s chief financial officer Meng Wanzhou is seen in a portrait photo. (AP)

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“It’s a much broader issue than just a trade dispute,” said Amanda DeBusk, chair of the international trade practice at Dechert LLP. “It pulls in: Who is going to be the world leader essentially.”

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The Huawei executive, Meng Wanzhou, was detained by Canadian authorities in Vancouver as she was changing flights Saturday — the same day that Trump and Xi met at the Group of 20 summit in Argentina and produced a cease-fire in their trade war. The Globe and Mail newspaper, citing law enforcement sources, reported that Meng is suspected of trying to evade US sanctions on Iran. She faces extradition to the United States, and a bail hearing was set for Friday.

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The British bank HSBC is cooperating with US authorities in its investigation, people familiar with the matter said Thursday.

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Huawei, the world’s biggest supplier of network gear used by phone and Internet companies, has long been seen as a front for spying by the Chinese military or security services, whose cyber-spies are widely acknowledged as highly skilled. A US National Security Agency cybersecurity adviser, Rob Joyce, last month accused Beijing of violating a 2015 agreement with the US to halt electronic theft of intellectual property.

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Other nations are increasingly being forced to choose between Chinese and US suppliers for next-generation “5G” wireless technology. Washington has been pushing other countries not to buy the equipment from Huawei, arguing that the company may be working stealthily for Beijing’s spymasters.

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Beijing protested Meng’s arrest but signaled that it doesn’t want to disrupt progress toward settling its trade dispute with the Trump administration. Chinese Commerce Ministry spokesman Gao Feng said China is confident it can reach a deal during the 90 days that Trump agreed to suspend a scheduled increase in US import taxes on $200 billion worth of Chinese products.

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US national security adviser John Bolton told NPR that he knew of the pending arrest in advance. He noted that there has been much concern about the suspicion that Chinese firms like Huawei use stolen US intellectual property.

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In the view of the United States and many outside analysts, China has embarked on an aggressive drive to overtake America’s dominance in technology and global economic leadership. According to analysts, China has deployed predatory tactics, from forcing American and other foreign companies to hand over trade secrets in exchange for access to the Chinese market to engaging in cyber-theft.

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Washington also regards Beijing’s ambitious long-term development plan, “Made in China 2025,” as a scheme to dominate such fields as robotics and electric vehicles by unfairly subsidizing Chinese companies and discriminating against foreign competitors.

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In addition to Trump’s tariffs, the administration is tightening regulations on high-tech exports to China. It’s also making it harder for Chinese firms to invest in US companies or to buy American technology in such cutting-edge areas as robotics, artificial intelligence and virtual reality.

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Earlier this year, the United States nearly drove Huawei’s biggest Chinese rival, ZTE Corp., out of business for selling equipment to North Korea and Iran in violation of US sanctions. But Trump issued a reprieve, possibly in part because US tech companies are major suppliers of the Chinese giant and would also have been scorched. ZTE got off with paying a $1 billion fine, changing its board and management and agreeing to let American regulators monitor its operations.

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The US and Chinese tech industries depend on each other so much for components that “it is very hard to decouple the two without punishing US companies, without shooting ourselves in the foot,” said Adam Segal, cyberspace analyst at the Council on Foreign Relations.

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Dean Garfield, president of the US Information Technology Industry Council trade group, said innovation by US companies often depends utterly on product development and testing by Chinese partners, not to mention component suppliers.

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British Telecom said this week that it would stop using Huawei equipment in its 5G network, the BBC reported, and US lawmakers have lobbied Canada’s prime minister to freeze out the Chinese supplier. New Zealand and Australia already have.  Other, less wealthy nations are concerned less about spying and more about low prices, which play to Huawei’s advantage.

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Both Huawei and ZTE have not only been barred from use by US government agencies and contractors; they have also been mostly locked out of the American market. A 2012 report by the House Intelligence Committee report urged US businesses to avoid their products and called for blocking all mergers or acquisitions involving them.

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And nearly a year ago, AT&T pulled out of a deal to sell Huawei smartphones.

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“There is ample evidence to suggest that no major Chinese company is independent of the Chinese government and Communist Party — and Huawei, which China’s government and military tout as a ‘national champion’ is no exception,” Sens. Mark Warner, D-Virginia, and Marco Rubio, R-Fla., wrote in October to Canadian Prime Minister Justin Trudeau. They urged him to keep Huawei off Canada’s next-generation network.

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Priscilla Moriuchi, a former East Asia specialist at National Security Agency now with the cybersecurity firm Recorded Future, said both ZTE and Huawei are wedded to China’s military and political leadership.

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“The threat from these companies lies in their access to critical Internet backbone infrastructure,” she said.

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“No matter what happens in the short term, (the arrest of Huawei’s CFO) is a symptom of a long-term technology clash,” said Derek Scissors, a China specialist at the conservative American Enterprise Institute. “We’re not going to deal that away in 90 days.”

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Scissors said he doubts that China will change its tech policies. Beijing must develop innovative technologies to keep its economy growing as its labor force ages and it confronts a huge stockpile of debt. Yet its political and economic system — which promotes inefficient state-owned companies at the expense of nimbler private ones — discourages innovation.
“I don’t see a way out of this,” Scissors said.

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Likewise, Rod Hunter, an international economic official in President George W. Bush’s White House and a partner at law firm Baker McKenzie, said, “I’m skeptical that the Chinese are going to want to say ‘uncle.’ ”

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US and Chinese officials are “trying to tackle a problem that is going to take years, maybe a decade, to resolve.”

Associated Press

Related:

U.S. Stocks Fall Sharply on Arrest of Huawei CFO

December 6, 2018

Major indexes are also weighed down by the tech sector and a drop in oil price

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Image result for Huawei , Signage, photos

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U.S. stocks fell sharply Thursday as the arrest of a top Chinese tech executive and a fresh decline in oil prices exacerbated the concerns about global growth that have rattled markets in recent weeks.

The Dow Jones Industrial Average slid 552 points, or 2.2%, to 24471, while the S&P 500 lost 1.9%, pulling both indexes back into the red for the year. The Nasdaq Composite declined 1%, cutting the technology-heavy index’s gains for 2018 to 2.6%.

All 30 stocks in the Dow industrials and all 11 sectors in the S&P 500 traded lower on the day. Caterpillar and Apple , which are sensitive to trade-related headlines, tumbled nearly 3%. And Chevron and Exxon slumped more than 2% as U.S. crude oil prices resumed their slide, falling 3.8%.

Thursday’s losses put the major indexes on course for their largest two-day point and percentage declines since Oct. 11.

“Everything feels out of control right now,” said Michael Antonelli, equity sales trader at R.W. Baird & Co. “Clients are starting to get more jittery.”

Markets started the week on a high note after President Trump reached a 90-day trade truce with his Chinese counterpart over the weekend, but that optimism turned to caution Tuesday, when the Dow industrials plunged nearly 800 points on renewed fears about the pace of economic growth.

U.S. markets were closed Wednesday for a national day of mourning for President George H.W. Bush.

The Huawei Arrest: An Unexpected Threat to Trade Talks

Meng Wanzhou — The Huawei Arrest: An Unexpected Threat to Trade Talks
As Washington-Beijing relations teeter, Chinese tech titan Huawei’s chief financial officer has been arrested in Canada and faces extradition to the U.S. But Meng Wanzhou, aka Sabrina Meng, isn’t your garden-variety executive; she’s the company founder’s daughter. Photo: EPA

Canadian authorities arrested Huawei Technologies’ chief financial officer over alleged violations of sanctions on Iran, which fanned fears of another escalation in tensions between the world’s two largest economies. Market reaction to the arrest threw into sharp relief the obstacles that lie ahead for negotiators in Washington and Beijing.

“Markets were already under pressure, and the arrest hasn’t helped,” said Neil Mellor, senior currency strategist at BNY Mellon. “We’re back to where we were beforehand, and we’re wondering if a deal’s possible given how high the stakes are.”

Tech firms have been among those worst hit by icy trade relations between the U.S. and China, weighing on global markets and prompting fears of slowing global growth. Dow components Apple and Intel fell 2.7% and 0.4%, respectively. Amazon.com and Facebook fell nearly 1%.

U.S. Treasury yields also continued slumping. The yield on the benchmark U.S. 10-year Treasury note was last 2.860%, slipping from 2.921% late Tuesday. Yields move inversely to prices.

U.S. government bonds are on the edge of a yield-curve inversion, where shorter-dated bonds yield more than longer-dated ones. An inverted curve is often interpreted as a signal of a looming recession.

Michael Arone, chief investment strategist for State Street Global Advisors, shook off recession fears, saying that even though earnings growth for S&P 500 companies is expected to slow next year, he still expects earnings-per-share growth of 9% year over year.

Trade, Tech and Tweets: Stock Markets May Get Even Bumpier in 2019
U.S. stock markets have gyrated this week with seemingly positive news on trade followed by President Trump tweeting he is still a “Tariff Man.” U.S.-China tensions, plus worries about economic growth and the tech sector, spell more volatility ahead for investors.

“The U.S. has never had a recession when U.S. corporate profits have been growing,” Mr. Arone said. “So although the backdrop is shifting somewhat from a higher growth regime to a lower growth regime, it’s too early to call the end of the bull market.”

In addition to headlines out of China, U.S. investors were awaiting a speech later Thursday from Federal Reserve Chairman Jerome Powell, which will be scrutinized for signals related to the central bank’s interest-rate policy.

While CME data gave a 76.6% probability of a rate increase at the Fed’s December meeting, figures show a less clear consensus for 2019, reflecting estimates of just over one rate raise. But some analysts see that as an overly dovish forecast.

Investors will turn their attention to Friday’s highly anticipated employment report. Economists surveyed by The Wall Street Journal expect employers added 198,000 jobs during the month and unemployment held at 3.7%.

Economists expect a further acceleration in average-hourly earnings, projecting wages advanced 3.2% for the month from a year earlier. Hourly wages rose 3.1% in October from a year ago, the best annual growth rate since 2009.

Mr. Arone said that as long as Friday’s wage figures don’t significantly accelerate, the markets will likely respond positively because it may ease inflation worries.

Meanwhile, U.S. crude fell 3.8% to $50.89 a barrel, after Saudi Arabia’s oil minister said there hadn’t yet been any agreement made over oil output cuts. Still, market participants were expecting an agreement to emerge in Vienna, where the Organization of the Petroleum Exporting Countries and its allies were scheduled to meet Thursday and Friday.

Energy shares were among the worst performers in the S&P 500, shedding 3.5%. Oil giant Chevron fell 3.5%, with sector peers following suit as a fresh wave of selling pounded oil-and-gas shares and global energy prices.

Bleak sentiment in the U.S. echoed that in Europe, where the Stoxx Europe 600 index slid 3.1%. That index, as well as benchmarks in Germany and the U.K., were all on course to close at two-year lows.

Losses were heavy in Asia, where Japan’s Nikkei 225 fell 1.9%. Hong Kong’s Hang Seng Index, as well as tech-dominated indexes like China’s Shenzhen A-Share and the Taiwanese Taiex, were all more than 2% lower.

Write to Jessica Menton at Jessica.Menton@wsj.com and David Hodari at David.Hodari@dowjones.com

https://www.wsj.com/articles/s-p-futures-tech-stocks-tumble-after-huawei-cfo-arrest-1544075565

This is Trump’s Major Foreign Policy Crisis: Trump Will Have To Confront China and Russia

December 6, 2018

The U.S.-China trade dispute went from bad to worse, despite Donald Trump’s crowing Tweets.

The arrest in Canada of Huawei Chief Financial Officer Meng Wanzhou, the daughter of the company’s founder, Ren Zhengfei, is no accident.

Ren Zhengfei is a former Chinese military specialist and a close friend of Xi Jinping.

Huawei has been at the center of China’s controversial Made in China 2025 technology dominance drive.

Image result for donald trump, photos

That effort, intelligence sources say, has become a “succeed at any cost” Chinese government program to buy, steal or otherwise obtain whatever technology it needed to win.

Meng Wanzhou even spoke to Huawei  corporate staff about the necessity to sometimes ignore national laws outside China in an effort some call “China First.”

Meng Wanzhou was arrested on the request of the U.S. Justice Department while she was in Canada. She is allegedly to be charged with working to violate U.S. sanctions on Iran.

“The securitate are in charge now,” said Duncan Clark, chairman of technology consultancy BDA China.

If all that isn’t enough, many are wondering how much Xi Jinping is helping Kim Jong Un in North Korea avoid sanctions.

Meanwhile, Putin’s Russia continues to hold Ukrainian Navy sailors and vessels seized November 25, 2018 in the Black Sea and Kerch Strait — a violation of international law that has been largely ignored.

Donald Trump will have to decide if, when and how to more directly confront both China and Russia if international law is to stand and have any meaning at all. He is being tested now, and the global stock markets seem to be sensing a very ugly future — and the end of Trumpism will surely follow — if China and Russia are ignored much longer.

Donald Trump seemed to want to make Vladimir Putin and Xi Jinping his friends. Now it should be clear that they are both his adversaries. And the world is wondering how much more trickery the United States can tolerate before it takes decisive action to counter these adversaries.

John Francis Carey
Peace and Freedom

 

Related:

China demands release of Huawei CFO from Canada

December 6, 2018
Huawei headquarters
Huawei headquarters in the UK. Photo: Steve Parsons/PA Images via Getty Images

China is demanding the release of Huawei CFO Meng Wanzhou from Canada after she was arrested there for violating Iran sanctions and faces extradition to the U.S., calling it a violation of her human rights. the AP reports.

Why it matters: Meng’s arrest could have quick, dramatic impacts in international politics and global technology sales, as Axios’ Joe Uchill reported. Huawei is one of the Chinese government’s “pet companies” — and Meng is the daughter of its founder. Markets have already dipped around the world today after the incident, amid fears it could ignite a new round in the U.S.-China trade dispute.

https://www.axios.com/china-demands-release-huawei-cfo-meng-wanzhou-canada-87e4a166-34d0-4edb-bc91-dedcbccea80d.html

U.S. Stocks Open Sharply Lower Following Arrest of Top Chinese Tech Executive

December 6, 2018

Arrest of Huawei finance chief stokes worries of escalation in U.S.-China tensions

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U.S. stocks opened sharply lower Thursday, as global markets shuddered over the arrest of a top Chinese tech executive and a fresh plunge in oil prices.

The Dow Jones Industrial Average fell 423 points, or 1.7%, to 24603 shortly after the opening bell. The S&P 500 dropped 1.4% and the Nasdaq Composite declined 1.9%.

“Everything feels out of control right now,” said Michael Antonelli, equity sales trader at R.W. Baird & Co. “Clients are starting to get more jittery.”

Canadian authorities arrested Huawei Technologies Co.’s chief financial officer, which fanned fears of another escalation in tensions between the world’s two largest economies.

“The market isn’t down because a random Chinese executive got arrested. That’s a trigger, something that exacerbates a bigger problem. It’s more follow through on trade concerns. Where are we with this trade deal with China? Did we make any headway? That market is saying we didn’t.”

Oil prices pared some of their earlier losses but Brent crude remained 2.9% lower at $59.80 a barrel, and West Texas Intermediate futures fell 3.4% to $51.09 a barrel, after Saudi Arabia’s oil minister said there had not yet been any agreement made over oil output cuts. Still, market participants were expecting an agreement to emerge in Vienna, where the Organization of the Petroleum Exporting Countries and its allies were scheduled to meet Thursday and Friday.

Bleak sentiment in the U.S. echoed that in Europe, where the Stoxx Europe 600 index slid 2.3% in afternoon trading. That index, as well as benchmarks in Germany and the U.K. were all on course to close at two-year lows. The European basic-resources sector led stocks lower and was on course to notch a 17-month low. The fresh wave of negative sentiment hammered the benchmark’s technology and energy basket, which fell 2.9% and 2.4%.

Trade, Tech and Tweets: Stock Markets May Get Even Bumpier in 2019
U.S. stock markets have gyrated this week with seemingly positive news on trade followed by President Trump tweeting he is still a “Tariff Man.” U.S.-China tensions, plus worries about economic growth and the tech sector, spell more volatility ahead for investors.

Losses were heavy in Asia, where Japan’s Nikkei 225 fell around 2%. Hong Kong’s Hang Seng Index, as well as tech-dominated indexes like China’s Shenzhen A-Share and the Taiwanese Taiex, were all more than 2% lower.

China’s Commerce Ministry said Thursday that Beijing would “immediately implement” agreements made at the Group of 20 summit in Argentina involving the Chinese purchase of U.S. products. The ministry also said planned talks on U.S. intellectual property and market-access concerns would occur within the allotted 90-day window before U.S. tariff increases are set to resume.

The Hong Kong-listed shares of China’s ZTE Corp.—a rival to Huawei and the nation’s second-largest telecom equipment maker—fell almost 6%. Shares of Huawei’s suppliers and partners also slumped, with phone-camera-lens supplier Sunny Optical Technology down 5.5%. Shares in Telefon AB L.M. Ericsson, one of Huawei’s and ZTE’s largest competitors, were last 1.7% higher, and were one of the few Stoxx Europe 600-listed stocks to climb Thursday.

The U.S. dollar bonds of privately owned Huawei touched new lows after news broke of its CFO’s arrest. The company’s debt maturing in 2025 has already been hit this year, and its yield climbed to 5.865% Thursday, up by more than 2 percentage points since January. Bond yields rise when prices fall.

“The panic reaction reflected investors’ concerns over a technology battle between the U.S. and China,” said Steven Leung, an executive director at UOB Kay Hian.

The impact of those headlines rippled across financial markets, causing at least one company to abandon its initial public offering. Denmark-based media company Adform announced it was postponing its IPO, citing ”a period of high volatility and uncertainty in the financial markets, especially as regards technology stocks.”

Tech firms have been among those worst hit by icy trade relations between the U.S. and China, which have weighed on global markets and prompted fears of slowing global growth so far this year. The Shanghai Composite and Shenzhen A-Share indexes have fallen 21% and 29%, respectively.

Market reaction to the arrest of Huawei’s CFO threw into sharp relief the obstacles that lie ahead for negotiators in Washington and Beijing.

“Markets were already under pressure, and the arrest hasn’t helped,” said Neil Mellor, senior currency strategist at BNY Mellon. “We’re back to where we were beforehand, and we’re wondering if a deal’s possible given how high the stakes are.”

The Chinese yuan, which has borne the brunt of trade anxieties, was last down 0.6% against the U.S. dollar, despite the China’s Commerce Ministry’s statements Thursday. The ministry also said it was confident about reaching consensus with the U.S. within three months.

Sharp selling Thursday marked a continuation of downbeat trading seen earlier in the week, as optimism from the G-20 waned amid persistent growth fears and sliding U.S. bond yields.

U.S. authorities have been probing Huawei for allegedly shipping products to Iran and other countries in violation of U.S. export and sanctions laws.
U.S. authorities have been probing Huawei for allegedly shipping products to Iran and other countries in violation of U.S. export and sanctions laws. PHOTO: ZHANG WENKUI/ZUMA PRESS

The yield on U.S. 10-year Treasurys was last 2.883% having slipped from 2.921% late Tuesday. The WSJ Dollar Index was last up 0.2%.

In addition to headlines out of China, U.S. investors were awaiting a speech scheduled for Thursday from Federal Reserve Chairman Jerome Powell, which will be scrutinized for signals related to the central bank’s interest-rate policy.

While CME data gave a 76.6% probability of a rate increase at the Fed’s December meeting, figures show a less clear consensus for 2019, reflecting estimates of just over one rate raise. But some analysts see that as an overly dovish forecast.

“Now everyone is looking at the Fed. The market took the Fed’s recent commentary as dovish and our view is that was an exaggerated interpretation,” said Christian Keller, head of economics research at Barclays Investement Bank.

Write to David Hodari at David.Hodari@dowjones.com, Mike Bird at Mike.Bird@wsj.comand Jessica Menton at Jessica.Menton@wsj.com

https://www.wsj.com/articles/s-p-futures-tech-stocks-tumble-after-huawei-cfo-arrest-1544075565

Huawei Technologies — Ignoring the law nothing new — “China First”

December 6, 2018

China is demanding that Canada release a Huawei Technologies executive arrested for possible extradition to the United States. Huawei’s chief financial officer, Meng Wanzhou, was arrested Saturday in Vancouver, Canada. The Globe and Mail newspaper, citing law enforcement sources, said she is suspected of trying to evade U.S. curbs on trade with Iran. Here are some key facts about the fast-growing telecoms equipment supplier.

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WHAT IS HUAWEI?

The privately held company, based in southern China’s tech hub of Shenzhen near Hong Kong, is the world’s largest supplier of network gear used by phone and internet companies. Huawei also recently surpassed Apple as the second biggest maker of cellphones after South Korea’s Samsung Electronics Co. The company, founded in 1987 by a former military engineer, Ren Zhengfei, who is Meng’s father, has 170,000 employees worldwide and says it has business in more than 170 countries.

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WHY IS THE COMPANY IN THE SPOTLIGHT?

Canadian officials said Meng faces possible extradition to the United States. The U.S. Justice Department has refused comment. The Globe and Mail newspaper cited law enforcement sources as saying she is suspected of trying to evade U.S. curbs on trade with Iran. Huawei says the U.S. requested Meng’s arrest and it is unaware of any wrongdoing. The company says it abides by all laws and rules where it operates.

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HUAWEI’S IRAN BUSINESS

Huawei’s business in Iran grew after Western companies withdrew to protest a crackdown on demonstrators in 2009. But the company said in late 2011 that it was limiting its business activity and no longer seeking new customers there because of an “increasingly complex situation.” In April, China appealed to the U.S. to avoid damaging business confidence after The Wall Street Journal reported Washington was investigating whether Huawei had violated sanctions on Iran. The report did not say what Huawei might be suspected of.

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HUAWEI AND ZTE

Both Huawei and ZTE Corp. have faced trouble with the U.S. and other governments over dealings with Iran and fears the Chinese companies’ equipment might be used for spying. ZTE was nearly driven out of business this year when Washington barred it from buying U.S. technology over exports to North Korea and Iran. President Donald Trump restored access after ZTE agreed to pay a $1 billion fine, replace its executive team and embed a U.S.-chosen compliance team in the company. Huawei seems much stronger commercially than ZTE, with the biggest research and development budget of any Chinese company and a vast portfolio of patents, making it less dependent on American suppliers.

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WHAT’S NEXT:

It’s unclear exactly what charges Meng could face if she is extradited to the United States. Security concerns have hampered Huawei’s business in the U.S. as acquisitions were rejected and companies warned not to source network equipment from Huawei or ZTE. That means the U.S. has less leverage over Huawei than over ZTE and some other Chinese companies. But the company is likely feeling pressure as other governments heed U.S. calls to limit Huawei’s access to their telecoms networks and strategically vital technologies.

Associated Press

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