Huawei Charges Stoke China Trade Talk Risk

(Bloomberg) --

The U.S. has escalated its attacks on China’s Huawei Technologies right before high-level talks on a broader trade dispute, risking muddying the waters as top commerce negotiator Liu He arrives in Washington.

Donald Trump’s administration will press Liu’s team to prove they can keep their promises in the talks focused on U.S. demands for structural changes to China’s economy and Beijing’s pledge to buy more American goods.

Indictments announced yesterday against Huawei – China’s biggest telecom company – could throw a wrench into the mood for the meetings. U.S. prosecutors accuse the company of stealing trade secrets and committing bank fraud. The case against Huawei contains a bigger message for world leaders considering whether to use its equipment in 5G networks: Don’t trust China.

The charges attack Huawei’s credibility at a time it is trying to convince the world it’s not an espionage tool for Beijing. Huawei denied the charges, and China called them “unreasonable.”

The stakes are extremely high, both for Huawei and the broader trade talks. It's just a month until an agreed truce on trade ends. The U.S. might say the Huawei issue is unrelated, but Beijing is likely to see it differently.

Huawei Charges Stoke China Trade Talk Risk

Global Headlines

Oil move | The Trump administration slapped sanctions on Venezuela’s state-owned oil company PDVSA, effectively blocking the regime from exporting crude to the U.S. The move, along with some not-so-subtle hints of a possible military buildup in Colombia, tests President Nicolas Maduro’s ability to hold onto power amid an economic depression, which is sure to get worse before it gets better.

Brexit tangle | Prime Minister Theresa May faces two key votes in Parliament that could shape Britain’s split from the European Union in what has been a long and increasingly complicated process. One is on a cross-party amendment that seeks to put Brexit on ice. The other is an attempt to unite May’s Conservative Party behind a plan to send her back to Brussels to renegotiate the most toxic part of the divorce: what would happen to the Irish border after Brexit.

Seasoned negotiators | Congressional leaders have tapped lawmakers with experience in deal-making to try and craft a border security compromise – a sign that both parties are in no mood for another government shutdown. But Trump, who has accepted Speaker Nancy Pelosi’s invitation to deliver the annual State of the Union address on Feb. 5, will need to sign off on any agreement. And the president’s still insisting on Mexico border wall money.

Wealth control | Post-communist Russia’s first generation of billionaires is starting to test President Vladimir Putin’s commitment to private property by transferring parts of their wealth to heirs. The last time that happened was before the 1917 Bolshevik revolution. A British lord persuaded Russian billionaire Oleg Deripaska to engage in another form of wealth transfer – surrendering control of his En+ Group – so the U.S. would lift sanctions from the company.

Israel's dilemma | As a world-leading innovator, Israel is a prime destination for global technology investments, including from China. But as the staunchest of U.S. allies, it’s coming under American pressure to clamp down on its dealings with Beijing. As Gwen Ackerman and Ivan Levingston report, that dilemma is increasingly weighing on the tech sector – and exercising the government – as Trump’s conflict with China sharpens.

What to Watch

  • Nigeria's Senate is asking the Supreme Court to rule on whether President Muhammadu Buhari breached the constitution by suspending the chief justice for an allegedly false declaration of assets before next month's general election.
  • Pakistan’s Supreme Court upheld its decision to acquit Asia Bibi, a Christian woman who spent eight years on death row on blasphemy charges. She’s free to leave the country, but fears remain for her safety.

And finally... China is using a song to remind Malaysia of warmer relations in the past, days after the government in Kuala Lumpur scrapped a $20 billion rail project that it backed. The Chinese embassy released the song on its Facebook page to commemorate 45 years of diplomatic ties. Titled “Bahu Kiri,” or left shoulder in Malay, and sung in Mandarin, the lyrics speak of a friendship against all odds: “My right shoulder protects you from the wind and the rain, my left shoulder is for you to hang on to.”

Huawei Charges Stoke China Trade Talk Risk

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