U.S. Move To End Huawei Saga Helps China Ties, China Welcomes Huawei Executive Home

Huawei’s chief financial officer Meng Wanzhou arrived in China on Saturday after ending her three-year U.S. extradition case. 

On the same day that two Canadians, Michael Kovrig and Michael Spavor, detained by Beijing, returned home.

What Happened: On Friday, daughter of Huawei Technologies founder Ren Zhengfei, Meng was given permission to go home after agreeing with prosecutors in the U.S. to end a bank fraud case.

According to Chinese officials, the case had to be dropped to mend ties between Beijing and Washington. 

The so-called “hostage diplomacy” comes two weeks after U.S. President Joe Biden called Chinese leader Xi Jinping in frustration over Beijing’s move to link progress on climate change with other demands, including Meng’s release as well as lifting sanctions and removing punitive tariffs. 

“This is a very significant move and symbolizes a new beginning for China and the U.S.,” Bloomberg quoted Henry Wang Huiyao, president and founder of the Center for China & Globalization policy research group in Beijing, as saying. 

“I am finally back home. Waiting in a foreign country was full of agony. The moment my feet touched the ceramic, I was speechless,” Reuters quoted Meng saying in the Global Times tabloid. 

Why It's Important: These latest developments will likely impact U.S. relations with China moving forward. “By agreeing to allow Meng to return to China, the Biden administration is signaling that it hopes to address the mess left by the former Trump administration,” said Wu Shinbo, dean of the Institute for International Studies at Fudan University.

According to the report, Meng was detained in December 2018 after a New York court in Vancouver issued an arrest warrant against her. 

The warrant said that she had tried to cover up her company's links to a firm that tried to sell equipment to Iran in violation of U.S. sanctions. 

However, Chinese Foreign Ministry spokeswoman Hua Chunying said the allegations against her were “fabricated” in an effort to suppress the country’s high-tech industries.

Meanwhile, critics have accused China of using the two Canadians as political bargaining chips. Spavor was charged with providing photographs of military equipment to Kovrig and was sentenced in August to 11 years in prison. 

This could be a win-win situation for Huawei after the release of Meng. Still, its competitors like HP Inc HPQ, Lenovo Group Limited (HKG 0992), Ericsson Nikola Tesla, Ericsson, ZTE, Apple AAPL, and Nokia may need another reason to rejoice depending on the performance of the company.

Related Link: Huawei Sees Colossal Decline In Smartphone Revenue

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