Ultimate Resource On Meng Wanzhou Chief Financial Officer of Huawei

American companies have been crucial in helping Huawei Technologies Co. become the world’s dominant telecommunications player. Ultimate Resource On Meng Wanzhou Chief Financial Officer of Huawei

Chinese Tech Shares Tumble on Spying Concerns (#GotBitcoin?)

**Meng Wanzhou Chief Financial Officer of Huawei**

The arrest of Meng Wanzhou has raised the stakes for Huawei and its overseas partners.

Silicon Valley giants from Intel Corp. to Broadcom Inc. and Qualcomm Inc. are top suppliers of Huawei, which buys their components to make equipment such as base stations and routers and Huawei mobile phones. By one estimate, Huawei will buy up to $10 billion of components from American companies this year—roughly the value of China’s automobile imports from the U.S.

Qualcomm and Intel are also working with Huawei on its development of next-generation 5G technologies, a field in which the Chinese company’s aim to be a global leader has alarmed some in Washington.

These interdependencies show how any U.S. actions against Huawei for alleged sanctions violations, which could go as far as a ban on it buying from American suppliers, could devastate Huawei’s operations, and curtail business for U.S. tech companies. Huawei’s chief financial officer, Meng Wanzhou, was arrested in Vancouver on Dec. 1 at the behest of U.S. authorities investigating fraud related to sales to Iran.

The arrest raised the stakes for Huawei and its overseas partners and has cast a pall over trade negotiations between the world’s two largest economies. Shares of tech companies in China and the U.S. have already slumped this year as fears rise that trade tensions will disrupt business across the Pacific.

In the wake of Ms. Meng’s arrest, Huawei has sought to reassure its suppliers. In a memo dated Dec. 6 and viewed by The Wall Street Journal, Huawei said it knew of no wrongdoing by Ms. Meng and it is “unreasonable of the U.S. government to use these sorts of approaches to exert pressure on a business entity.” Huawei’s partnerships with global suppliers wouldn’t change, it said.

If the U.S. concludes Huawei evaded U.S. sanctions, further actions could follow. Huawei’s chief Chinese rival, ZTE Corp. , was originally slapped with a fine after it admitted to evading U.S. sanctions, but subsequent violations of its settlement agreement led the U.S. government to temporarily ban American companies from selling it products—sending ZTE to the brink of collapse. Authorities imposed a similar ban on Chinese chip maker Fujian Jinhua Integrated Circuit Co. in October, citing national-security and economic concerns.

U.S. companies stand to lose too, with China being the second-biggest buyer of its $58.4 billion of semiconductor exports last year, according to the U.S. International Trade Administration. Huawei alone is on track to buy about $10 billion of components from U.S. companies this year, up from $8 billion in 2017, estimates Handel Jones, chief executive of technology consulting firm International Business Strategies Inc., which tracks China’s high-tech sector.

“It’s a pretty extensive list of companies that would be heavily impacted” if Huawei were to lose access to its American suppliers, Mr. Jones said. ”It would be a very serious situation.”

Huawei is by far the biggest-spending Chinese tech company when it comes to research and development. It has an in-house chip-design unit that is the seventh largest in the world. It is working on high-end chips for artificial intelligence, and its chips are increasingly displacing foreign suppliers in its smartphones: Only 7% of the semiconductors inside Huawei’s top-of-the-line P20 Pro are from American suppliers, according to ABI Research, compared with 60% in ZTE’s high-end Axon M device.

Yet Huawei still relies on imports from U.S. chip companies such as Broadcom, Xilinx Inc. and Analog Devices Inc. for components used in its telecom equipment, according to a breakdown of its suppliers by investment bank Jefferies. Huawei buys equipment from data-storage equipment maker Seagate Technology PLC for use in its enterprise business, and uses memory chips made by Micron Technology Inc. in its smartphones, the bank said.

A Xilinx spokeswoman said the company “is aware of the situation and is monitoring it closely.” The other suppliers either declined to comment or didn’t respond to requests for comment.

It’s a pretty extensive list of companies that would be heavily impacted. —Handel Jones, CEO of International Business Strategies, on what would happen if Huawei loses access to its American suppliers

Intel and Qualcomm, which draw huge revenue from China, are seen by Huawei as more than suppliers. In Huawei’s annual report, Intel is described as a “strategic partner,” and the companies work together in a range of areas, including next-generation 5G technology.

On Dec. 5, Huawei announced it had completed a test of key 5G technology using Intel processors and a Huawei base station.

In September, Huawei credited help from Intel as it made its first phone call on a type of 5G network.

Intel declined to comment.

Qualcomm has also been a collaborator in 5G. Earlier this year, the San Diego chip maker said it supplied prototype equipment used in a 5G test by Huawei. In 2015, Qualcomm, Huawei and China’s largest chip maker, Semiconductor Manufacturing International Corp. , launched a joint venture in Shanghai to work on next-generation chip technology.

Fears about Huawei’s dominance in 5G technology were behind the U.S.’s decision to scuttle the takeover of Qualcomm by Broadcom earlier this year. Both companies declined to comment.

Updated: 9-24-2021

China Frees Canadians After Huawei CFO Leaves, Ending Crisis

In a sudden resolution to a diplomatic crisis between the U.S., China and Canada, a top Huawei Technologies Co. executive flew home as China released two jailed Canadians.

For almost three years, Meng Wanzhou, Huawei’s chief financial officer, was under house arrest in Vancouver as she battled extradition to the U.S. on fraud charges. Across the Pacific, Michael Kovrig and Michael Spavor — detained within days of Meng’s December 2018 arrest — languished in Chinese jails, pawns caught in a geopolitical rivalry between the U.S. and China.

The seemingly intractable impasse came to a rapid resolution Friday after Meng struck a deferred prosecution agreement with U.S. authorities to resolve criminal charges against her. Within hours, the Supreme Court of British Columbia discharged her and Meng immediately left for the airport to board a chartered Air China flight back to Shenzhen, home to the Chinese technology giant’s headquarters.

Shortly after, Prime Minister Justin Trudeau announced that the two Michaels, as they’re known in Canada, were also on their way home.

“There is going to be time for reflections and analysis in the coming days and weeks,” Trudeau told reporters in Ottawa. “But the fact of the matter is I know that Canadians will be incredibly happy to know that right now, this Friday night, Michael Kovrig and Michael Spavor are on a plane and they’re coming home.”

China on Saturday reiterated its stance on the issue, saying the arrest of Meng was a political persecution against Chinese citizens with a purpose to suppress Chinese high-tech companies. What the U.S. and Canada did is a typical arbitrary detention, state broadcaster CCTV said on Saturday, quoting Foreign Ministry spokeswoman Hua Chunying.

U.S. Secretary of State Antony Blinken said in a statement that his government welcomed China’s decision to release the two Canadians “after more than two-and-a-half years of arbitrary detention.”

The long-running case became a symbol of the intensifying geopolitical rivalry between the U.S. and China, throwing into stark relief the risk faced by those who get caught in the middle. Within days of her arrest, Chinese authorities jailed two Canadians, triggering a diplomatic showdown that has cost billions of dollars in lost trade and plunged bilateral relations to their worst point in decades.

U.S. prosecutors in Brooklyn had charged Meng with fraud, accusing her of lying to HSBC Holdings Plc about Huawei’s business dealings in Iran as part of an attempt to violate U.S. trade sanctions. Meng had denied any wrongdoing and accused the U.S. of overreach.

Appearing by video on Friday, Meng pleaded not guilty in a Brooklyn courtroom but subsequently admitted to misleading a financial institution about Huawei’s business operations in Iran. U.S. government lawyers said they will defer prosecution in the matter and dismiss the charges entirely by Dec. 1, 2022, if Meng complies with terms of the agreement, which include refraining from saying anything that contradicts U.S. prosecutors’ stated facts about the case.

Huawei said in a statement on Saturday that it looks “forward to seeing Ms Meng returning home safely to be reunited with her family.” The company will continue to defend itself against the allegations in the U.S. court.

The subject of Meng’s return trended on Chinese social media Saturday, attracting more than 110 million views on the country’s Twitter-like website Weibo.

The Communist Party’s People’s Daily said in a Weibo post that it was because of China’s “relentless efforts,” while Global Times Editor-in-Chief Hu Xijin said in a post that he hoped Meng’s release could help thaw China’s relationship with Canada and improve ties with the U.S.

Since Meng’s arrest during an airport stopover in Vancouver, her case has emerged as part of a broader effort by the U.S. government to contain Huawei, which Washington has designated a national security threat. The Chinese Communist Party, in turn, saw the pursuit of Meng — the eldest daughter of Huawei’s powerful founder — as a politically motivated attack on one of its chief technology champions.

The two Michael’s release is a critical triumph for Trudeau, just days after a national election in which he faced stiff criticism from the rival Conservatives over his handling of relations with Beijing.

China had repeatedly linked the cases of the two Michaels, as they are known in Canada, to Meng’s, with a Foreign Ministry spokesman saying last year that halting her extradition “could open up space for resolution to the situation of the two Canadians.”

Spavor, a Canadian tour organizer, was sentenced last month to 11 years for spying. There had not yet been a verdict for Kovrig — a Hong Kong-based analyst at the International Crisis Group and former Canadian diplomat — who was arrested the same day as Spavor. The two men were detained more than 1,000 days.

Huawei CFO Meng Wanzhou Leaves Canada On A Flight To China

Almost three years after she was arrested at a Vancouver airport, Huawei Technologies Co. Chief Financial Officer Meng Wanzhou left Canada on a flight to China on Friday afternoon, according to a person familiar with the matter.

Meng, who had reached a deal to end U.S. criminal charges against her, departed on a chartered Air China plane bound for Shenzhen, where Huawei has its headquarters, the person added.

Under an agreement with federal prosecutors, Meng, 49, admitted she had misled HSBC Holdings Plc about the telecom company’s business with Iran, in violation of U.S. sanctions on that nation. Meng will face no further prosecution and could see the charges against her dismissed by December 2022 if she complies with the terms of the agreement.

But a larger racketeering indictment is still pending against Huawei, which grinds on even as a broader rivalry between Washington and Beijing sees relations between the two powers at their lowest point in years.

Meng’s arrest sparked a diplomatic crisis and retaliatory trade measures by China, which has called her prosecution a politically motivated attack on one of its chief tech champions. With the bank fraud, conspiracy and wire fraud charges against her, Meng, the daughter of Ren Zhengfei, Huawei’s founder, faced as many as 30 years in prison if convicted in the U.S.

The Justice Department said Meng’s admissions “confirm the crux of the government’s allegations in the prosecution of this financial fraud — that Meng and her fellow Huawei employees engaged in a concerted effort to deceive global financial institutions, the U.S. government and the public about Huawei’s activities in Iran.”

The company has pleaded not guilty.

Supreme Court of British Columbia Associate Chief Justice Heather Holmes discharged Meng after the U.S. said it would withdraw its extradition request. The development clears the way for Meng, who had been under house arrest in Vancouver since December 2018, to return home to China.

Pro-Meng supporters gathered outside court in Vancouver on Friday chanting “Not guilty!” After the hearing, Meng gave big hugs to colleagues as she left the courtroom amid applause. One picked her up off her feet. She thanked her boosters, the Chinese consul and the Canadian people and apologized “for the inconvenience.”

There was at least one detractor, too, as a car came by with the driver shouting out an obscenity against Meng and the Chinese Communist Party, to some cheers. Meng sped off in a black SUV.

The U.S. said it would pursue its racketeering case against the company.

“Our prosecution team continues to prepare for trial against Huawei, and we look forward to proving our case against the company in court,” Assistant Attorney General Kenneth Polite said in a statement.

David Bitkower and Michael Levy, lawyers for Huawei in the U.S., didn’t immediately return voicemail and email messages seeking comment on Meng’s accord and the impact it might have on their case.

Canada will be looking for clarity on what the decision means for two of its citizens jailed in China after Meng’s detention.

Given the tensions around the case and the number of other unresolved issues between the U.S. and China, Friday’s deal spurred speculation that it was part of some broader agreement or that the U.S. got something in return.

“If this individual from Huawei is able to go home, I would expect there are other pieces to some type of an arrangement, whether there is a quid pro quo, whatever. China has made this a priority,” Richard Haass, president of the Council on Foreign Relations, said on “Balance of Power” on Bloomberg TV on Friday.

The Two Michaels

China has frequently linked Meng’s case with that of jailed Canadian citizens Michael Spavor and Michael Kovrig. The two Michaels, as they are known in Canada, were detained in China within days of Meng’s arrest.

If the deal with Meng is followed by a reciprocal agreement by Beijing to release them, it would represent a political victory for Prime Minister Justin Trudeau, just days after a national election in which he faced stiff criticism from the rival Conservatives over his handling of relations with Beijing.

The return of Meng would be a win for Chinese President Xi Jinping, who is banking on a tough stance with countries including the U.S., Canada and Australia to deliver kudos at home as he heads into a key leadership meeting of the ruling Communist Party next year.

Officials at China’s embassies in Washington and Ottawa didn’t immediately respond to requests for comment. Spokespeople for Huawei in Canada also didn’t respond.

Appearing by video in federal court in Brooklyn, earlier on Friday from her lawyer’s office in downtown Vancouver, Meng pleaded not guilty. U.S. government lawyers said they would defer prosecution in the matter and dismiss the charges by Dec. 1, 2022, if Meng complies with the agreement, which bars her from contradicting a four-page statement of facts that recites the U.S. case against her.

In the Brooklyn hearing she admitted she made “knowing false statements” to a financial institution not identified by the U.S. In earlier court proceedings HSBC has been identified as the institution.

“Under the terms of this agreement, Ms. Meng will not be prosecuted further in the United States and the extradition proceedings in Canada will be terminated,” one of her lawyers, William Taylor, said in a statement. “She has not pleaded guilty and we fully expect the indictment will be dismissed with prejudice after fourteen months. Now, she will be free to return home to be with her family.”

Prosecutors alleged that Huawei and Meng lied to HSBC about Huawei’s relationship with a third company that was doing business in Iran, as part of a scheme to violate the trade sanctions. Meng was accused of personally making a false presentation in August 2013 about those ties.

U.S. prosecutors raised the stakes last year by adding racketeering conspiracy charges against Huawei, alleging it had won international standing by stealing trade secrets in a 20-year pattern of corporate espionage.

Hope this news will become a reality and hope Ms. Meng can regain her freedom and return to China. pic.twitter.com/x2KovlFq0T
— Hu Xijin 胡锡进 (@HuXijin_GT) September 24, 2021

While the indictment doesn’t name the businesses from which Huawei allegedly stole intellectual property, details of the allegations match descriptions of companies including Cisco Systems Inc., Motorola Inc. and Cnex Labs Inc.

China had long argued that the U.S. was using Meng as a bargaining chip to achieve other demands. That suspicion appeared to be affirmed in December 2018, when then-President Donald Trump told Reuters in an interview he would intervene in U.S. efforts to extradite Meng if it would help him reach a trade deal.

As Meng’s case appeared to languish, pressure on Trudeau’s government grew. Last month, a Chinese court jailed Spavor for 11 years on spying charges. But while that decision left the door open for his eventual deportation, it sparked more international criticism.

Trudeau condemned the verdict as “absolutely unacceptable and unjust” while David Meale, the top U.S. diplomat in Beijing, called the proceedings a “blatant attempt to use human beings as bargaining leverage.” In a separate statement, U.S. Secretary of State Antony Blinken condemned Beijing’s sentencing and called for the immediate release of all people “arbitrarily” detained in China.

The conviction of Spavor, along with that of Kovrig — a Hong Kong-based analyst at the International Crisis Group and former Canadian diplomat — fed criticism of the expansion of “hostage diplomacy.” China has repeatedly linked the cases to Meng’s, with a Foreign Ministry spokesman saying last year that halting her extradition “could open up space for resolution to the situation of the two Canadians.”

Trudeau’s incumbent Liberals won a third term this week, but the prime minister was unable to regain majority control of the legislature. The continued detention of the two Michaels remains a central foreign policy issue for his government.

The case is U.S. v. Huawei Technologies Co. Ltd. et al., 18-cr-457, U.S. District Court, Eastern District of New York (Brooklyn).

Updated: 9-25-2021

Huawei CFO Gets Hero’s Welcome While Canadians Land Quietly

China gave a hero’s welcome to Huawei Technologies Co.’s executive Meng Wanzhou as she touched down three years after her arrest in Canada, while two Canadians freed by Beijing returned to their homeland with less fanfare.

“I am finally home after over 1,000 days of suffering,” Meng, in a red dress, said tearfully to the cheering crowd after landing at Shenzhen Bao’an International Airport around 10 p.m. local time on Saturday.

The event, broadcast live by state media, dominated nine out of the top ten trending hashtags on the Chinese social media site Weibo. The tallest building in the city lit up with scrolling slogan “Welcome Home, Meng Wanzhou” across its facade.

In contrast, Canadians Michael Spavor and Michael Kovrig arrived to a more low-key reception. The pair landed in Calgary before sunrise on Saturday, accompanied by Dominic Barton, Canada’s ambassador to China.

Dressed in blazers and face-masks, they were met by Prime Minister Justin Trudeau, who hugged the pair on the tarmac. Government officials, including Deputy Prime Minister Chrystia Freeland and the nation’s spy agency, tweeted welcome messages to the pair, who were expected to reunite with their families in private.

Michael Kovrig and Michael Spavor are now home — they, as well as their families, have shown incredible strength, bravery and resilience. The Canadian government has worked hard to secure their release. We thank everyone involved who helped make it possible.
— Chrystia Freeland (@cafreeland) September 25, 2021

“There is going to be time for reflections and analysis in the coming days and weeks,” Trudeau told reporters late Friday after announcing China had released the men.

The two Canadians applied to courts for bail on medical reasons, which was granted, China’s Xinhua News Agency reported. Xinhua didn’t say what health conditions the pair had.

U.S. Deal

The daughter of Huawei’s billionaire founder Ren Zhengfei, Meng boarded an Air China plane on Friday to return to Shenzhen, where Huawei is based, after reaching a deferred prosecution agreement with U.S. authorities to resolve criminal charges against her.

She’d been under house arrest in Vancouver for almost three years as she battled extradition to the U.S. on fraud charges. Meng spent her time in confinement at her Vancouver mansion, and could venture out at times, wearing a GPS anklet, to shop at high-end boutiques with private security in tow.

Meng Wanzhou waved at a cheering crowd as she stepped out of a charter plane at Shenzhen Bao’an International Airport in south China on Saturday night. pic.twitter.com/1doEiOrhIB
— People’s Daily, China (@PDChina) September 25, 2021

She thanked the support from the Chinese government and people, and said she was touched by President Xi Jinping’s concern for her case.

After her speech, Meng sang along as the crowd burst into a patriotic Chinese song called “Ode to the Motherland.” She then boarded a bus headed for quarantine.

“Facts have long proved that this is a political persecution against a Chinese citizen with the aim to oppress China’s high-tech companies,” the Chinese foreign ministry said in a statement. “The ‘fraud’ accusations against Ms. Meng are nothing but fabrication.”

Triumph For The People

An opinion piece published by the official People’s Daily calls Meng’s return a triumph for the Chinese people. The article, “No Force Will Prevent China’s Progress,” says the peaceful return of Meng shows the lasting strength of China’s Communist Party and the country’s 1.4 billion people.

In a post on her WeChat account reported by state media, Meng called China her backbone and said her freedom was thanks to a powerful home nation. Foreign Ministry spokesman Zhao Lijian also wrote “Welcome Home” in a Weibo post.

As part of the deal that led to Meng’s release, China set free Kovrig and Spavor, who were detained within days of Meng’s December 2018 arrest. The release of the two Canadians wasn’t widely reported by Chinese state media.

Kovrig is a former diplomat who works for the International Crisis Group, a Brussels-based think-tank. Spavor is a founding member of Paektu Cultural Exchange, an organization that facilitates ties with North Korea.

The ‘two Michaels’ — Michael Kovrig and Michael Spavor — were released by China and arrived in Calgary on Saturday, following the release by Canada of Huawei CFO Meng Wanzhou on Friday.

More @business: https://t.co/DaUUOs75MA pic.twitter.com/TbwmXUZCFL
— Bloomberg Quicktake (@Quicktake) September 25, 2021

Updated: 9-27-2021

Beijing Claims Victory Over Huawei Executive’s Return

Chinese media play down release of two Canadian citizens that came minutes after Meng Wanzhou boarded her flight home.

When Huawei Technologies Co. executive Meng Wanzhou arrived in Shenzhen after nearly three years’ confinement in Vancouver, 430 million Chinese viewers tuned into a livestream by China’s state broadcaster, while posts about her racked up more than a billion views.

Absent from Chinese state media was any mention of the release of two Canadian citizens by Chinese authorities within minutes of Ms. Meng boarding her plane.

Michael Kovrig, a Canadian diplomat on leave, and businessman Michael Spavor were detained by Chinese authorities on the same day in December 2018, shortly after Ms. Meng was arrested in Vancouver on an extradition request from the U.S.

The men were charged with espionage and held in detention, largely cut off from the outside world, in what was widely seen as retaliation for Ms. Meng’s arrest.

The announcement from Canadian officials that Messrs. Kovrig and Spavor were heading home to Canada came after the U.S. revealed on Friday that it had reached an agreement with Ms. Meng to drop wire and bank-fraud charges in exchange for an admission of other wrongdoing.

While media outside China analyzed at length the timing of the Canadians’ release in relation to Ms. Meng’s, Chinese media ignored it almost completely, instead casting Ms. Meng’s release as the product of heroic, albeit unspecified, efforts on the part of the Communist Party.

The party’s flagship newspaper People’s Daily and state broadcaster China Central Television both seized on Ms. Meng’s return to tout the party’s determination to safeguard the rights of its citizens abroad. The Communist Party’s anticorruption body drew parallels with government evacuations of Chinese citizens from dangerous situations in Yemen and Afghanistan.

“The great Communist Party of China has always been the backbone of the Chinese people,” the Central Commission for Discipline Inspection said on its website.

The propaganda push comes as China pursues a more confrontational approach in its disagreements with the U.S. and other Western countries, setting aside its past preference for understated diplomacy in favor of an aggressive “Wolf Warrior” ethos.

Foreign Ministry officials say the shift is being driven by demands from leader Xi Jinping and pressure to stay in step with the increasingly nationalistic tone of Chinese public opinion online.

In highlighting the release of Ms. Meng without acknowledging the steps China took to get her back, Chinese leaders are trying to preserve the idea that they are capable of winning the respect of Western powers by muscling their way through contentious issues, according to Victor Shih, a China politics scholar at University of California, San Diego.

“The Chinese government most likely wanted to create an impression that it was China’s power and smart policies that led to her release and not China’s willingness to make concessions,” Mr. Shih said. “For the general population, it’s probably quite successful.”

One of the few Chinese outlets to report on the release of the Canadian men was the Global Times, a nationalist tabloid, which on Sunday cited an unnamed government department in saying that the two men had been let go for medical reasons.

In a separate English report, the newspaper also denied allegations that Beijing had engaged in “hostage diplomacy” but offered no details about the state of the men’s health.

A scattering of internet users raised questions about why the men had been allowed to leave the country, since both had faced espionage charges. Mr. Spavor was found guilty and sentenced to 11 years in prison in a verdict last month, while Mr. Kovrig was still awaiting a verdict.

“Whether or not the handling of the cases of these two Canadians were linked to Meng Wanzhou’s case, China must have a legal basis for allowing them to return home,” human-rights lawyer Liu Xiaoyuan wrote in a widely read post on the popular messaging app WeChat. The post was later taken down.

On the Twitter -like Weibo platform, several others said they saw the Canadians as bargaining chips and approved of them being exchanged for Ms. Meng. “It has to be said that we are politically clever,” wrote one user.

The overwhelming majority of commenters, however, mirrored state media in portraying China as winning a war of wills with Canada and the U.S., decorating their posts with Chinese flags, red roses and raised-fists emoticons.

“The Chinese side will never accept any form of political coercion,” read a comment that attracted tens of thousands of likes on Weibo’s tightly controlled platform. It “will never allow Chinese citizens to become victims of political persecution in other countries.”

CCTV noted that viewers of its livestream showing Ms. Meng descending from the cabin door of a government-chartered Air China airplane outnumbered the populations of the U.S. and Canada combined.

“The hero’s welcome is in line with the narrative of ‘[The West is] trying to stop us because we’re getting strong,’ ” said Jude Blanchette, a China scholar at the Washington-based Center for Strategic and International Studies. “Xi thinks China is strong enough that it doesn’t need to factor in Western sentiment and sensibilities.”

Much of the social-media discussion centered on a speech that Ms. Meng delivered in front of a crowd of flag-waving diplomats and Huawei employees after landing in Shenzhen. “If faith has a color, it must be China red,” she said, in a line that was quoted widely across the Chinese internet.

The speech will likely add to Western perceptions of close ties between the Chinese Communist Party and Huawei, the world’s largest manufacturer of telecom equipment, despite the company’s insistence that it operates independently of Beijing, scholars said.

“What Beijing is missing is that this leads to an erosion of its global reputation,” said Mr. Blanchette.

Updated: 9-28-2021

China Releases Two U.S. Citizens Blocked From Leaving Since 2018

Exit from China of Victor Liu and Cynthia Liu coincided with U.S. deal that freed Huawei executive.

China has let go two Americans who have been banned from leaving the country since 2018 and allowed them to return to the U.S. following a Justice Department deal with a Chinese technology-company executive, according to people familiar with the situation.

The exit from China of Victor Liu and Cynthia Liu over the weekend coincided with the U.S. deal last week that freed Huawei Technologies Co. Chief Financial Officer Meng Wanzhou and the almost simultaneous departure from China of Canadian prisoners.

A State Department official confirmed that the Massachusetts siblings, both in their 20s, returned to the U.S. on Sunday after more than three years of being subject to a vague “exit ban” from China. The pair had faced no allegations of wrongdoing in the country and were free to move around China, just not leave it.

The official said that the U.S. welcomes their return, that consular officials in Shanghai handled the matter and that the U.S. opposes the use of coercive exit bans. The official said the U.S. would continue to advocate on behalf of all American citizens in China subject to such bans and arbitrary detentions.

Their surprise release followed Ms. Meng’s agreement Friday to accept some allegations of wrongdoing leveled by the Justice Department. That ended a U.S. request of Canada—where Ms. Meng had been detained in late 2018—for her extradition on U.S. charges relating to Huawei’s business. At almost the same time that Ms. Meng left Canada for China, two Canadians jailed in China flew back home.

The Liu siblings, who couldn’t be reached through their lawyers, had become a prominent example of China’s use of extralegal exit bans that Western diplomats say have grown more common under President Xi Jinping’s rule. U.S. officials raised the case when meeting with their Chinese counterparts, according to a person familiar with the matter.

As part of its travel advisory for China, the U.S. State Department warns that exit bans on foreign nationals exemplify arbitrary enforcement of laws in that country. It says that exit bans often aren’t known to exist until a person attempts to leave and that they have been used to compel targets to cooperate with Chinese law enforcement or to pressure family members to return to China.

U.S. officials said the Justice Department’s decision to resolve the case against Ms. Meng was separate from negotiations over detained Westerners.

“The Justice Department reached the decision to offer a deferred prosecution agreement with Ms. Meng independently, based on the facts and the law, and an assessment of litigation risk,” department spokesman Anthony Coley said.

The releases have highlighted how Washington and Beijing have forged a degree of cooperation despite deep policy differences, including over justice matters.

White House press secretary Jen Psaki told reporters Monday that President Biden spoke with Mr. Xi about Huawei and the Canadians earlier this month but didn’t negotiate the issues.

The American siblings’ father is Liu Changming, a former senior executive at China’s state-owned Bank of Communications Co. , who is a fugitive from China and one of the country’s most wanted men. His whereabouts is unknown and he couldn’t be reached.

Chinese Foreign Ministry spokeswoman Hua Chunying said at a press conference Tuesday that the police lifted restrictions on the siblings in September “in light of progress in an investigation into their parents’ cases.” She defended the exit bans as legal and an “independent judicial procedure.”

Now in his mid-50s, the elder Mr. Liu was the top Communist Party official at the bank’s Guangzhou branch. Chinese prosecutors accuse him of making around $1.4 billion in illegal loans, according to reporting about him in the country’s government-run media. He went missing between late 2007 and early 2008, when he failed to report for a new role in the company, Chinese reports say.

His children have said publicly that they haven’t had any contact or relationship with their father for several years. Their mother, Sandra Han, a U.S. citizen who traveled with the pair to China, remains detained there, according to people familiar with the matter.

When the siblings went to China to visit relatives in 2018, Victor Liu was a sophomore at Georgetown University. Ms. Liu has been employed by McKinsey & Co., the firm formerly led by Canada’s ambassador to China, Dominic Barton, who was involved with the release of his country’s two citizens last week.

A lawyer for the pair told CBS that the two were detained to pressure Liu Changming into returning to China. “We’ve done nothing wrong, and we need to go home,” Ms. Liu said in the CBS report.

Georgetown President John J. DeGioia, who visited Victor Liu during his time in China and advocated the pair’s release, welcomed their return in a statement.

Their case was central to the reintroduction in April of legislation by Democratic and Republican senators aimed at punishing Chinese officials who use exit bans and at generating more transparency about the process.

“This unfair ‘exit ban’ policy violates international human-rights norms and has been used to keep Americans in China for years,” said a statement from the senators, Ed Markey (D., Mass.), Elizabeth Warren (D., Mass.), Chris Van Hollen (D., Md.) and Marco Rubio (R., Fla). Mr. Markey and Ms. Warren said in a statement Monday that they would continue to work with the Biden administration to secure Ms. Han’s release.

Ultimate Resource On Meng Wanzhou Chief Financial Officer of Huawei

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