Asian stocks rocked by arrest of senior Huawei executive in Canada

James Booth
The arrest of the founder of Huawei's daughter has cast doubts on the US-China trade detente (Source: Getty)

Asian stocks were hit had this morning by news of the arrest of the daughter of the founder of Chinese tech firm Huawei in Canada.

Meng Wanzhou, who is also Huawei’s chief financial officer, was arrested in Canada on 1 December and faces extradition to the US.

She was arrested in connection with the violation of US sanctions.

Her shock arrest throws into doubt the seeming easing of economic tensions between China and the US.

Asian stocks fell this morning on the news with MSCI's index of Asian shares excluding Japan down 2.22 per cent, Japan's Nikkei 225 down 1.91 per cent, the Shanghai composite index down 1.68 per cent and Hong Kong's Hang Sen down 2.68 per cent.

The Chinese embassy in Canada said it opposed her arrest.

“The Canadian police, at the request of the United States, arrested a Chinese citizen who had not violated any US or Canadian law,” the embassy said in a short statement on its website.

“China has already made solemn representations to the United States and Canada, demanding they immediately correct their wrong behaviour and restore Ms Meng Wanzhou’s freedom.”

Meng is one of the vice chairs on the Chinese technology company’s board and the daughter of company founder Ren Zhengfei. Huawei is strategically important to China’s ambitions in technology from 5G networks to chips.

Huawei confirmed the arrest in a statement and said that it has been provided little information of the charges, adding that it was “not aware of any wrongdoing by Ms Meng”.

It has previously been reported that US authorities were probing the world’s second-largest smart phone maker for allegedly shipping US-origin products to Iran and other countries in violation of US export and sanctions laws.

Suppliers to the privately owned tech giant saw their shares hit with Samsung Electronics down 2.29 per cent and Chinasoft International down 11.93 per cent.

Yesterday it emerged that BT had banned the use of Huawei's equipment in its 5G mobile network over security fears.

A court date has been set for Friday.