Yet if you want a real indication the US and China are not friends look at Huawei: the extradition of their CFO Meng Wanzhou to the US from Canada for bank fraud cleared a key hurdle on Friday. The extraordinary lengths China is going to in regards to the firm continues to underline suspicions it is not just an ordinary private enterprise: paid press-junkets; creepy Stalinist videos of children singing its praises; open threats being made to Canada for complying with the rule of law; and the farcical news Meng, living a comfortable life on bail at her luxury home in Vancouver, is suing the Canadian government over her “illegal” arrest procedure. I’m sure the detained Canadian Michael Kovrig, who has disappeared into the same kind of black-hole the former Chinese head of Interpol did --to zero Khashoggi-style outrage-- would happily change places. Anyway, put Huawei with Friday’s GDP and do you want to be long CAD?
In short, the Huawei issue still signals serious US-China and Chinese-Canadian tensions, and markets should focus on that rather than the noise of the nth iteration of a Panglossian WSJ trade article. Moreover, Huawei also signals serious US-EU tensions that markets had better wake up to. Germany is serious about allowing Huawei to build its 5G network on the proviso the firm promises not to spy on it: even the head of Germany’s spy agency seems OK with that. Of course, this is all kinds of ridiculous. It’s one thing to say Germany does not buy US arguments Huawei is a national security risk: it’s a whole other level to then imply those arguments are credible, but proceed on the basis of a pledge of good behaviour. Would you rent a room to a suspected serial killer if they pinky swore not to murder anyone in the house just because you needed the rent?
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