The Possible Meaning and Impacts of Huawei Global CFO Arrest in Canada

Huawei’s global chief financial officer, Meng Wanzhou, has been arrested in Vancouver and is being sought for extradition by the US government. The reason was because Huawei violated US sanctions against Iran.

Hong Kong fell about 2.5% and Tokyo stocks closed down 1.9%. Shanghai’s market fell 1.7%, while US stock futures were pointing down more than 1%. Major indexes in Europe fell by around 1% to 1.5% in morning trading.

Is this just to send the signal to China that the US is still super-serious about the downside actions if there is no successful trade deal?

Is it hardball trade deal negotiations and a warning to the world about the seriousness of Iran sanctions.

Does this mean that China will arrest US executives?

Does this mean that Russia will arrest foreign executives?

It does toss create a lot of uncertainty now because we clearly do not know how this will play out. It could end up being smoothed over at the end but it seems like a move with a lot of risk.

It is very obvious that Iran sanctions will stay locked down as long as it takes to make them do whatever the US wants. The US and especially Texas wins with less Iranian oil. The US is becoming a major exporter of oil and not needing any imports. The only imports of oil will be unrefined oil which the US will make money in refining and then re-exporting.

Meng is also the daughter of Huawei’s founder.

Michael Every, head of Asia-Pacific research at investment bank Rabobank says “It’s as strong a message to China’s elites as a horse’s head in your bed,” he wrote in a note to clients.

Separately Notice How China Has a Lot of Powerful Women Executives. This is not the case in the US

China has a lot of powerful and competent women executives. This is the case even at technology companies. This is not the case in the USA.

The USA also has very few chinese-american executives of any gender. Obviously, China is filled with powerful and effective business and political executives who are all chinese.

In 2011, about 19 percent of Chinese women who are in management positions hold the title of CEO, the second highest percentage recorded among 39 countries and regions included in a recent survey. The average figure for the world was 8 percent, according to the 2011 Grant Thornton International Business Report. This is an older statistic, but I am pretty sure not much has changed in China or in the rest of the world.