Huawei to be major topic in US-China trade talks, White House adviser John Bolton says

  • US national security adviser highlights practice of Chinese firms using stolen American intellectual property to engage in forced technology transfers
  • Bolton was aware of plan to arrest Huawei CFO going into US-China trade negotiations on December 1
PUBLISHED : Friday, 07 December, 2018, 8:41am
UPDATED : Wednesday, 12 December, 2018, 8:53pm

Global Chinese tech firms like Huawei, whose chief financial officer is expected to be extradited to the United States by Canada, will be a “major subject” of discussion between the US and Chinese governments over the course their trade negotiations, US national security adviser John Bolton said on Thursday.

The US had enormous concerns for years “about the practice of Chinese firms to use stolen American intellectual property to engage in forced technology transfers, and to be used, really, as arms of the Chinese government’s objectives in terms of information technology in particular”, Bolton said in an interview with National Public Radio.

“Huawei is one company we’ve been concerned about,” the senior White House adviser said. “There are others as well. I think this is going to be a major subject of the negotiations that President Trump and President Xi Jinping agreed to in Buenos Aires.”

Why Huawei and its CFO are caught in the middle of the US-China trade war

The company has been in the US government’s cross hairs for some time, having been banned from bidding for government contracts in 2014.

In 2017, Huawei was identified in a US Defence Department report into China’s technology transfer strategy as a “national champion” favoured by Beijing. The company was one of the vehicles through which the government sought to “accomplish [its] larger economic goals”, the report said.

Huawei CFO’s arrest may pose a threat to China’s 5G ambitions

“Before the US-China Economic and Security Review Commission, a former forensic auditor and counter-intelligence analyst testified that China is executing a series of campaigns targeting specific industries he studied including telecommunications and network equipment (to benefit global champions Huawei and ZTE), information security, semiconductors, media and entertainment and financial technology,” the report said.

ZTE is another global Chinese telecommunications company that fell afoul of US authorities. Earlier this year, the US Treasury Department banned the company from buying any American components for seven years after it violated US sanctions by selling products to Iran and North Korea.

US may use arrest of Huawei CFO Sabrina Meng to push China on trade

ZTE eventually agreed to pay a total of US$1.4 billion in fines and escrow funds, appoint a new board of directors and install compliance oversight managers chosen by the US, and the ban was lifted on July 13.

The latest developments around Huawei bear out Bolton’s message.

The same day Xi and Trump met in Argentina, the company’s CFO Sabrina Meng Wanzhou was arrested in Canada at the request of the United States, which is reportedly investigating whether the telecoms giant contravened US sanctions by selling technology to Iran.

Bolton said on Thursday that he was aware of the plan to arrest Meng going into the December 1 meeting between the US and Chinese delegations.

“This is something that we get from the Justice Department and these kinds of things happen with some frequency,” he said. “We certainly don’t inform the president on every one of them.”

Citing an unnamed White House official, Reuters reported on Thursday that US President Donald Trump was not informed about the US request for Meng’s extradition before the dinner meeting with Xi.

Huawei arrest signals trouble for US tech companies with business in China

In a tweet on Thursday afternoon, Republican Senator Marco Rubio brushed away speculation that Meng’s arrest would be a bargaining chip in negotiations between the US and China. “It’s an action by federal prosecutors for alleged violations of law, not leverage in a trade dispute,” he said.

The US Justice Department declined to comment or provide details of the charges against Meng, who is expected to attend a bail hearing at Vancouver’s British Columbia Supreme Court on Friday.

At a press conference on Thursday, Canadian Prime Minister Justin Trudeau said that his government had been advised “with a few days notice that this was in the works”.

“There was no engagement or involvement at the political level in this decision because we respect the independence of our judicial processes,” he said.