China tells US to stop ‘unreasonable crackdown’ on Huawei

U.S. pressure on China is set to intensify further when intelligence chiefs brief Congress

China called on the U.S. government on Tuesday to “stop the unreasonable crackdown” on Huawei after the U.S. stepped up pressure on the tech giant by indicting it on charges of stealing technology and violating sanctions on Iran, complicating high-level trade talks between the countries about to begin in Washington.

The Chinese government will “firmly defend” its companies, a foreign ministry statement said. It gave no indication whether Beijing might retaliate for the charges against Huawei, China’s first global tech brand and the biggest maker of switching gear for phone and internet companies.

U.S. pressure on China is set to intensify further when intelligence chiefs brief Congress Tuesday on worldwide threats, which are expected to include Chinese cyberespionage and Huawei.

The charges could dim prospects for U.S.-Chinese trade talks due to start Wednesday in Washington. Unless the two sides can forge an accord by March 1, U.S. tariffs on $200 billion of Chinese products are set to rise from 10 per cent to 25 per cent.

Huawei Technologies Ltd., which has spent a decade battling U.S. accusations it is a front for Chinese spying, denied committing any of the violations cited in Monday’s indictment.

The foreign ministry complained Washington has “mobilized state power” to hurt Chinese companies “in an attempt to strangle fair and just operations.”

“We strongly urge the United States to stop the unreasonable crackdown on Chinese companies including Huawei,” said the statement read on state TV. It said Beijing will defend the “lawful rights and interests of Chinese companies” but gave no details.

The charges unsealed Monday by the Justice Department accused Huawei of trying to take a piece of a robot and other technology from a T-Mobile lab that was used to test smartphones. Huawei passed Apple in mid-2018 as the second-biggest global smartphone brand after Samsung.

The U.S. charges included no allegation Huawei worked at the Chinese government’s direction. But the U.S. government has previously accused China of involvement in cyberspying and theft of industrial secrets. It has charged several Chinese hackers and intelligence officials.

Huawei also is charged with using a Hong Kong front company, Skycom, to trade with Iran in violation of U.S. controls. Prosecuters allege Huawei’s chief financial officer, Meng Wanzhou, lied to banks about those dealings.

Meng, the daughter of Huawei founder Ren Zhengfei, was arrested Dec. 1 in Vancouver, a development that set off a political firestorm between China and Canada.

China detained two Canadians shortly after Meng’s arrest in an apparent attempt to pressure Canada to release her. A Chinese court also sentenced a third Canadian to death in a sudden retrial of a drug case, overturning a 15-year prison term handed down earlier.

“We urge the U.S. to immediately withdraw the arrest warrant against Miss Meng Wanzhou and stop making such kinds of extradition requests,” said a Foreign Ministry spokesman, Geng Shuang. “We urge Canada to take seriously China’s solemn position, immediately release Ms. Meng Wanzhou and protect her legitimate and legal rights.”

Huawei, headquartered in the southern city of Shenzhen, near Hong Kong, has rejected the U.S. accusations.

“The company denies that it or its subsidiary or affiliate have committed any of the asserted violations of U.S. law set forth in each of the indictments,” a Huawei statement said.

Huawei is “not aware of any wrongdoing by Ms. Meng, and believes the U.S. courts will ultimately reach the same conclusion,” it said.

Meng is out on bail in Vancouver and is due in court Tuesday as she awaits extradition proceedings.

Huawei’s U.S. market evaporated after a 2012 congressional report said it and Chinese rival ZTE Corp. were security risks and told phone companies to avoid them. But Huawei says the scrutiny has had little impact on its business elsewhere.

The company says it serves 45 of the 50 biggest global telecom carriers. It forecasts its 2018 global revenue should exceed $100 billion for the first time despite the tension with Washington.

Huawei said U.S. prosecutors rejected a request to discuss the investigation following Meng’s arrest. It also noted the allegations in the trade secrets charge were the subject of a U.S. civil lawsuit that already has been settled.

The entirely state-controlled Chinese press has portrayed Huawei as the victim of U.S. government efforts to cripple a potential industrial challenger.

“This is not just the matter of Huawei. It involves the whole nation of China,” said Qin Xiaohua, who works in the finance industry in Beijing. “We have to unite no matter as individuals or as an integrated country.”

While U.S. authorities stress the independence of courts, “ordinary Chinese people all believe it is a deliberate crackdown on Huawei,” said Lu Feng, an economist at Peking University. He said Beijing will see a “link to Chinese-U.S. trade relations.”

“The difference in understanding will bring about complicated problems,” said Lu.

President Donald Trump and his Chinese counterpart, Xi Jinping, agreed Dec. 1 to put off further sanctions against each other’s exports while they negotiated a new trade pact. The prospect of higher tariffs has rattled financial markets for months.

Asked about the possible effect of the Huawei case on trade talks, the foreign ministry spokesman, Geng, said, “as for the China-U.S. trade talks and our position on this, I think the U.S. is also quite clear about that.”

The Justice Department officials provided details from a 10-count grand jury indictment in Seattle, and a separate 13-count case from prosecutors in New York.

The Seattle charges allege that beginning in 2012, Huawei plotted to steal information about T-Mobile’s robot, known as “Tappy.” It says Huawei engineers secretly took photos of the robot, measured it and tried to steal part of it from T-Mobile’s lab, according to prosecutors. T-Mobile declined to comment.

AP researcher Yu Bing in Beijing and AP writers Christopher Bodeen in Beijing, Michael Balsamo, Eric Tucker and Christopher Rugaber in Washington, Rob Gillies in Toronto and Tali Arbel in New York contributed.

Joe McDonald, The Associated Press

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