- In what amounted to a hostage swap, Canada released Huawei’s Meng Wanzhou from house arrest, and Chinese authorities deported two Canadian expatriates jailed for espionage.
- Despite the resolution, the net effect of the three-year ordeal has been to harden hearts and stoke nationalism on all sides; this hostility will remain an obstacle to improved relations.
- Beijing sees the outcome as confirming its view that the US legal system is highly subject to political influence, despite Western pieties about rule of law.
Meng’s release was made possible by the US Justice Department, which reached a Deferred Prosecution Agreement with Meng, enabling US prosecutors to withdraw their extradition request. US prosecutors had accused Meng of defrauding HSBC by concealing Huawei’s control over another company that sold US equipment to Iran in defiance of US sanctions. Under the agreement, Meng admitted to some wrongdoing but did not enter a formal guilty plea.
Scars from a long ordeal
Meng’s arrest in 2018 was a milestone in US-China relations. To some observers, the Justice Department’s decision to prosecute Meng, who is Huawei’s chief financial officer and the daughter of company founder Ren Zhengfei, appeared politically motivated. The Meng prosecution arguably departed from normal Justice Department practice on sanctions enforcement, which has been to prosecute banks and other corporate entities rather than individual executives. Media reporting at the time indicated that Trump administration officials were looking for creative ways to pressure Huawei in the context of escalating concerns about US-China technological competition. Former president Donald Trump’s public statement that he would be willing to use Meng as a bargaining chip in trade negotiations strengthened that impression.
Nevertheless, Western policymakers and commentators considered Beijing’s response shocking and excessive. The two Canadians, Michael Kovrig and Michael Spavor, were held for over 18 months before prosecutors brought formal charges. The conditions of their detention were harsh, including long periods of solitary confinement, frequent interrogations, and minimal consular access. These conditions stood in contrast with Meng, who consulted daily with lawyers from her seven-bedroom Vancouver mansion while wearing an ankle bracelet.
While it is not impossible that one or both Michaels had some connections to Canadian intelligence, it is highly unlikely that they were involved in espionage as that term is commonly understood. Court proceedings were shrouded in secrecy, strengthening the impression that the evidence against the defendants was weak. The two Michaels were well known to journalists and other influential expats in China. Their detentions sent shockwaves through the foreign community, convincing even some less hawkish observers that Beijing had crossed a threshold into a more brutal form of authoritarianism.
The foreign ministry’s repeated denial of any connection between Meng’s case and the two Michaels, combined with Beijing’s insistence that the Canadians’ cases were being handled strictly according to law, appeared transparently insincere. The release of the two Michaels within hours of Meng’s departure from Canada seems to confirm this impression.
In theory, the resolution of this ordeal removes an obstacle to improving US- China and Canadian-China relations. Chinese President Xi Jinping raised Meng’s case with US President Joe Biden when the two spoke by phone on 9 September. If this same resolution had occurred two years ago, it may have served that purpose. But given the broader stalemate in US-China relations – resulting from three years of accumulated hostility over this case and many other issues – the resolution of Meng’s case alone probably cannot overcome the overall atmosphere of distrust and recrimination.
In fact, US authorities’ decision to release Meng is probably not even intended as a gesture towards repairing bilateral relations. On the contrary, US authorities were probably reluctant to abandon Meng’s prosecution but considered it necessary to secure the two Michaels’ release and allow a US ally, Canada, to escape the vice grip of two great powers pushing in opposite directions. The Justice Department has not come away completely empty-handed, however, as Meng stipulated to certain facts that officials say will support a separate pending case against Huawei.
Compared to Washington, Ottawa may be somewhat more inclined to treat the two Michaels’ release as an opportunity to repair relations. In an optimistic scenario for Beijing, this improvement could eventually lead Canada to support Beijing’s application for membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), but this process will be slow, if it occurs at all.
Beijing sees the outcome as confirming its view that the US legal system is thoroughly subject to political influence, despite Western pieties about rule of law. In China, Meng has been greeted as a returning hero who fought against US aggression and won. Most Chinese are untroubled by Beijing’s use of hostage diplomacy; they feel that US aggression caused this incident, and Beijing’s retaliation was an act of self-defense. Though the Communist Party’s propaganda apparatus has fueled this sentiment, organic, grassroots support for Meng is also strong.
Despite the resolution, the net effect of the three-year ordeal has been to harden hearts and stoke nationalism on all sides. While a resolution was a necessary precondition for improving relations, it is not nearly sufficient to produce that outcome, which will require more profound political shifts in all three countries.