Chinese tech giant Huawei’s Chief Financial Officer Meng Wanzhou was arrested by Canada at the request of the US on December 1, the day Chinese President Xi Jinping and his US counterpart Donald Trump met on the sidelines of the G20 summit in Argentina. The timing of the arrest and the countries involved will undoubtedly have consequences for international relations.
First, Ms Meng was arrested when not only China and the US are set to restart trade negotiations over the next 90 days but Canada is also seeking to improve ties with Beijing. Since Canadian Prime Minister Justin Trudeau took office, China-Canada relations have gone down a slide.
In the beginning, Mr Trudeau wanted better ties with China and four rounds of talks were held to explore the prospects of a free trade agreement. However, the process stalled at the end of 2017 when the countries didn’t agree on a deal. In early October, the US, Canada and Mexico signed a revamped North American Free Trade Agreement, known as USMCA. The inclusion of an anti-China “poison pill” into the new deal further hurt China-Canada relations.
Second, Canada has a special place in the subtle trilateral relationship among China, the US and Canada. As a US ally, Canada has long been criticised for blindly following the US in foreign affairs. Ottawa has also wanted to use its “middle power” status to serve as a mediator between China and the US, but hasn’t succeeded. After Mr Trudeau took office, much on the agenda of China-Canada relations was displaced as a result of turmoil created by the US and its allies, with the free trade agreement a typical example.
Ms Meng’s case is a test for Canada’s ability to walk the tightrope between China and the US. Trudeau said Ottawa had a few days’ notice for the arrest and authorities acted without political interference. It’s true that judicial independence should be respected. But from a diplomatic perspective, the Trudeau government underestimates how severely ties with China could be affected and the amount of diplomatic pressure Ottawa will face. Canada is caught in a dilemma. It will have to face dual pressure –from China and the US. No matter which way it goes, Canada will rattle either China or the US.
Ms Meng’s case is complicated. It not only has potential repercussions for the China-US trade war and 5G competition, but also Canada’s choice on cyber security. The 5G race is far more than a competition in telecommunications and network technologies. Whoever wins will have an upper hand in the future wireless network market. The involvement of governments has further complicated the competition.