It’s as if Sheryl Sandberg had been abducted by Community Party officials after traveling to Beijing. That’s how the Chinese public has responded to the imprisonment of Meng Wanzhou, the Huawei chief financial officer who was arrested in Canada last week at the request of the U.S. government, dramatically escalating the stakes of Donald Trump’s trade war. The grim details of Meng’s personal health make her status as a political pawn all the more unpleasant: according to court filings by her lawyers, Meng is a survivor from thyroid cancer and suffers from hypertension and sleep apnea. (“I continue to feel unwell,” Meng writes in the filing, “and I am worried about my health deteriorating while I am incarcerated.”) They are also likely to make tensions between the two countries even worse. The Chinese have already launched online protests over Meng’s detention—in one popular video, investment consultant Chen Shouhua smashes an iPhone with a hammer. In Silicon Valley, meanwhile, the arrest has brought fears of reprisals. “It’s worrisome, because it’s an escalation we did not need,” one executive told Kara Swisher. “What China will do, given all the existing tensions, is anyone’s guess.”
The ostensible reason for Meng’s arrest was her alleged role in circumventing U.S. sanctions against Iran—according to Canadian prosecutors, she had “direct involvement” in a scheme to convince banks that a Huawei subsidiary was a separate company, thereby tricking financial institutions into clearing millions of dollars in Iran-linked transactions. (Huawei has said it is “not aware of any wrongdoing” by Meng, and that it “complies with all applicable laws and regulations where it operates.”) Underscoring her arrest, however, is a desperate fear of China’s growing tech prowess. Historically Beijing has been the one playing catch-up, imitating gadgets made by U.S. companies, and allegedly stealing American intellectual property. But in 2015, China unveiled a strategic initiative, Made in China 2025, aimed at closing the gap with Western countries, and has since made massive investments in future technologies. While the early days of mobile communication were dominated by the U.S. and Europe, China is now poised to surpass the United States with investments in technologies such as 5G—the next generation of wireless networks that will power things like autonomous vehicles, and virtual reality, and could be as much as 100 times faster than 4G, the current standard. Many 5G networks are being deployed by Huawei.
Washington’s national security fears are not unwarranted. China has used its emergent tech dominance not only to expand its control over its own people—implementing facial-recognition surveillance technologies across the country to catch jaywalkers and identify alleged thieves—but also, critics allege, to spy on other countries. Huawei, like most tech giants in China, has close ties to the government: the company’s founder, Meng’s father, was an engineer in the People’s Liberation Army. Earlier this year, the heads of the F.B.I., C.I.A., and N.S.A. warned against using Huawei devices, citing a “[deep concern] about the risks of allowing any company or entity that is beholden to foreign governments . . . to gain positions of power inside our telecommunications networks.” In testimony before the Senate Intelligence Committee, F.B.I. director Christopher Wray said an overabundance of Huawei devices in the U.S. “provides the capacity to exert pressure or control over our telecommunications infrastructure . . . provides the capacity to maliciously modify or steal information. And it provides the capacity to conduct undetected espionage.”
Growing concerns over Chinese technological supremacy provide context not only for Meng’s arrest, but also the trade war Trump is trying to win with Beijing. A key premise of the president’s position—that billions of dollars of tariffs on Chinese goods are necessary to defend the “national security” of the country—is that China has flagrantly stolen U.S. intellectual property. American companies have complained for years that China forces U.S. companies to hand over their I.P. as the cost of doing business in the People’s Republic. (Chinese laws require that foreign businesses seeking to enter certain sectors form joint partnerships with local firms, allegedly facilitating the transfer of sensitive technologies to Chinese competitors.) But while the president may be right to crack down on I.P. theft, his heavy-handedness in the Meng case is unlikely do the U.S. any favors. The nationalistic Chinese middle class is up in arms, potentially throwing up a roadblock to U.S. tech companies, such as Facebook and Google, that are hoping to enter the Chinese market. Silicon Vally executives are reportedly worried that they, too, could become pawns in a high-stakes political game if they travel to China. Perhaps most important, Meng’s plight “will make it harder for the reformers [in China] to speak up,” Deng Yuwen, a political analyst in Beijing, told the Times. “In the short term, the United States might gain from playing this card,” he added. “But in the longer term, it doesn’t gain from this.”
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