After Wanzhou's arrest, what lies next for Huawei? - Recent

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my-3.25"><span class="story__time text-3 text-black "><span class="timestamp--label">Updated</span> <span class="timestamp--time timeago" title="2018-12-22T12:11:56+05:00"><span class="timestamp__calendar">22 Dec, 2018</span> <span class="timestamp__time">12:11pm</span></span></span> </div><span dir="auto" class="story__byline text-4 my-3.25"><a class="story__byline__link" href="https://web.archive.org/web/20220816222821/https://aurora.dawn.com/authors/3635/natashe-zafar">Natashe Zafar</a></span>  <div dir="auto" class="story__excerpt text-4 font-light my-3.25">How Meng Wanzhou’s arrest disrupted the global stock markets. </div> <div class="slideshow w-full slideshow--main " data-slick="{"dots":true,"dotsClass":"slideshow__pager ","asNavFor":null,"cssEase":"ease","speed":250,"autoplaySpeed":2000,"slidesToScroll":1,"slidesToShow":1,"fade":false,"autoplay":true,"infinite":true,"responsive": [{"breakpoint": 767,"settings": {"slidesToShow": 1,"slidesToScroll": 1}},{"breakpoint": 575,"settings": {"slidesToShow": 1,"slidesToScroll": 1}}]}"> <div class="slideshow__slide slideshow__slide--first slideshow__slide--horizontal lg:w-full md:w-full w-full" style="">  <figure class="media media--uneven media--fill sm:w-full w-full mb-0 "> <div class="media__item "><picture><img src="https://web.archive.org/web/20220816222821im_/https://i.dawn.com/primary/2018/12/5c1b3cd1b2a25.jpg" alt=""/></picture></div> <figcaption class="media__caption "> </figcaption> </figure> </div> </div> </div> <div class="template__main flow-root px-1 w-full sm:px-7">  <div dir="auto" class="story__content overflow-hidden font-normal story__content--normal pt-6.75 mt-3.25"><p>On December 1, Meng Wanzhou, the CFO of China’s largest private company, Huawei, and the daughter of Ren Zhengfei, the founder of Huawei, was arrested in Canada. Due to alleged defrauding charges, she faces extradition in the United States. Incidentally, Wanzhou’s arrest took place on the same day that US President Donald Trump and Xi Jinping (the president of China) met in Buenos Aires and agreed to a trade ceasefire for 90 days during which time, both parties would negotiate. On December 14, Wanzhou was released on bail; the stir her arrest has created is larger than one could have anticipated and according to CNBC, “it immediately hit US stocks and sent global markets into a tailspin. The dollar weakened against major currencies.”</p> <p>Meng has been accused of violating US sanctions against Iran between 2009 and 2014 through the use of Huawei’s subsidiary, Skycom, a telecom equipment company which was conducting business with Iran. As Iran and the United States have not had any formal diplomatic relations since 1980, trade between China and Iran has made the US more wary of the already delicate relations they have with China. </p> <p>US prosecutors believe Wanzhou had misrepresented the relationship between Huawei and Skycom by portraying them as separate entities in order to avoid sanctions on Huawei to conduct business with Iran, as well as deceiving banks about the true association between the two companies. Wanzhou denies these allegations and any wrongdoing.</p> <hr/> <h4 id="5c1de3bc4640e">In addition to affecting the US stock exchange, Wanzhou’s arrest caused Asian indices to plummet – Nikkei, Hang Seng, Shanghai; Europe’s Stoxx600 also saw a drop in their stocks as a result of the arrest. Others like Pegatron and Foxconn have reported to be planning on opening more factories outside China in order to avoid the impact of tariffs.</h4> <hr/> <p>Earlier this year, in October, news broke that the Five Eyes (Australia, Canada, New Zealand, the United Kingdom and the United States) the leading intelligence-sharing network had been exchanging information on China’s foreign activities with other countries since the beginning of 2018, and there are speculations that these countries were gaining allies to ensure that China’s economic growth is halted. Meanwhile, China condemns any accusations that it seeks to influence foreign governments and is making politically-driven investments.</p> <p>In addition to affecting the US stock exchange, Wanzhou’s arrest caused Asian indices to plummet – Nikkei, Hang Seng, Shanghai; Europe’s Stoxx600 also saw a drop in their stocks as a result of the arrest. Others like Pegatron and Foxconn have reported to be planning on opening more factories outside China in order to avoid the impact of tariffs. </p> <p>Further complicating the matter is that the US government is believed to have been putting pressure on US and foreign telecom and internet providers to discontinue the use of Huawei’s telecom equipment as they believed Beijing could at any time ask the company to hand over personal information, making their products default spyware. Despite this, Huawei thrived and has become the world’s second largest maker of smartphones after Samsung.</p> <p>The United States holds its place as the world’s largest economy, followed by China, although the latter has a larger GDP when measured by PPP. The relationship between the two has been a complex one; however, for the most part it has remained strong and somewhat positive, although chances are that it may become even more complicated as the scandal unfolds. Although trade talks between China and the US will continue as scheduled in January, 2019, what remains to be seen is how Wanzhou’s arrest will affect Huawei’s position as the second-largest manufacturer of smartphones in the world and one of the largest telecommunications-equipment manufacturers in the world.</p> </div> </div>  <div class="ad ad--adjustable-mobile py-6.75 block sm:hidden" aria-hidden="true"> <div class="js-ad flow-root" style="max-width:300px;max-height:250px;text-align:center;margin:0 auto;overflow:hidden;"> <div class="radWrapper ad__wrapper"> <div id="div-gpt-ad-1455520357400-4" class="ad__wrapper__slot" style="width:300px;height:250px;"> <script> render('div-gpt-ad-1455520357400-4') </script> </div> </div> </div> </div>  <div class="template__footer flow-root px-1"> <div class="my-3.25 flow-root">  <div class="js-social-fb social social--iframe float-left pr-1.5 "> <iframe 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data-type="votes" class="button border-none px-2 py-1 outline-none js-comments-sort ml-1 float-right text-gray-400 uppercase">BEST</button> <button type="button" data-type="new" class="button border-none px-2 py-1 outline-none js-comments-sort ml-1 float-right text-gray-400 uppercase">NEWEST</button> <button type="button" data-type="old" disabled="disabled" class="button border-none px-2 py-1 outline-none js-comments-sort ml-1 float-right text-gray-400 uppercase">OLDEST</button> </div> <br/><br/> <div class="comment pb-4 mb-4 border-b border-gray-300 border-solid" id="9774"> <div class="flex"> <div class="w-11/12"> <div class="flow-root"> <span class="comment__author text-3 uppercase float-left text-gray-400">Rajiv</span> <span class="timeago comment__date uppercase text-3 pb-2 float-left pl-2 text-gray-400 content-before-dash" title="2018-12-21T03:16:07+05:00"><span class="timestamp--time timeago" title="2018-12-21T03:16:07+05:00">Dec 21, 2018 03:16am</span></span> </div> <div dir="auto" class="whitespace-pre-wrap break-words leading-normal comment__body text-gray-500 text-4.5">This is a really misleading article. The reasons for the slowing economies and dropping indices are several and have been adding up for months. Wanzhou's arrest has had little, probably no impact. The current slowdown is a result of fundamental macro-economic indicators taking a turn for the negative.</div> <div class=""> </div> </div> </div> </div> <div class="comment pb-4 mb-4 border-b border-gray-300 border-solid" id="9775"> <div class="flex"> <div class="w-11/12"> <div class="flow-root"> <span class="comment__author text-3 uppercase float-left text-gray-400">Hyder</span> <span class="timeago comment__date uppercase text-3 pb-2 float-left pl-2 text-gray-400 content-before-dash" title="2018-12-21T16:15:06+05:00"><span class="timestamp--time timeago" title="2018-12-21T16:15:06+05:00">Dec 21, 2018 04:15pm</span></span> </div> <div dir="auto" class="whitespace-pre-wrap break-words leading-normal comment__body text-gray-500 text-4.5">Sir For long the United States has enjoyed being lone super power twisting arms of other nations and attacking them at will but now the emergence of China as a real economic super power and potential military power has upset the balance of power. Well the USA's power is waning and it should back away gracefully before it gets itself kicked hard by the new super power!!! 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After Wanzhou's arrest, what lies next for Huawei? - Recent - Aurora