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arrest of Huawei CFO/heiress

December 11, 2018

I’ve been happily away from political/IR blogging for a while, but depending on how this turns out, it may be the biggest geopolitical event of the year. At least for symbolic value.

Meng Wanzhou is CFO and daughter of the founder of the #1 telecom equipment company in the world (and #2 phone maker after Samsung). She is accused of involvement in trade with Iran – a charge that is purely extraterritorial and based on ad-hoc laws created exclusively for geopolitics rather than a criminal element.

If Meng is extradited to the US, it will be a crossing of the Rubicon, in my opinion. But extradition is a long way away at the moment, and all the signs are already pointing to a rapidly intensifying conflict, so it’s just a matter of time anyway. I’m not looking forward to any such thing, and I don’t think any sane person would. However, geopolitical sanity is in short supply this century.

Canada is currently under a lot of pressure from the US, and not just the Trump administration. Belief that Iran is of central importance to US strategic position enjoys broad bipartisan support in US government, and that will pretty much drive what Canada does. Canada-US trade is about $500B, Canada-China trade is around $60B (wiki). So it’s easy to see where how that line of influence plays out. The other angle is Canadian real estate, with Toronto and Vancouver experiencing some of the most intense home price increases (source). Wealthy Chinese are said to make a notable contribution to those markets, although there’s no obvious reason to believe that the Chinese government would target overseas property ownership, as it is a vital form of individual and family safety-net enjoyed by elites of all nations.

20181210: Monitoring the situation…

Perspective on this (j sachs/project syndicate) – talks about how it is a radical departure from norms, in the relationship between the US national security state and high level officers of major global businesses.

NYT article indicating that Meng should not expect a fair hearing in Canadian court (that is, examination of evidence or jurisdiction), in extradition proceedings. Nor will she in the US, since the Iran sanctions laws are specifically formulated to put political and personal pressure on foreign businesses (what would be called blackmail / extortion if other countries did the same thing) – to shut down trade with a particular nation.

20181211 14:30 Eastern time – looks like her offer for $15M bail is being taken seriously – and may be accepted once technicalities are ironed out. (?) – (based sketchy live notes from here: https://www.caixinglobal.com/live/ ). (Other live ish coverage from the Vancouver Star). Also US press has conspicuously dropped this as the lead story, compared to previous days.

18:00 Eastern time – UPDATE – granted $10M bail ($7M cash), restricted to local area.

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