But this arrest is likely to be seen by China as an attack and “hostage taking”, says Elliott Zaagman, who has covered the Chinese firm for the better part of the last two decades.
“China has a reputation for making agreements and not keeping them, not following through,” he told me on the phone from Boston. “There’s a theory that this could be a way for the US to hold Beijing to its word on the trade war.”
If so, it is a move the Chinese media has not taken well.
“The US is trying to find a way to attack Huawei,” says Hu Xijin, editor in chief of the Chinese and English editions of the Global Times – a publication often seen as a mouthpiece of the Chinese government.
“It is trying to keep Huawei down. That’s why it has pressured its allies not to use Huawei’s products. It is trying to destroy Huawei’s reputation.”
What Mr Hu is referring to is the recent rejection of Huawei’s services by a number of US allies, including Australia, New Zealand and most recently the UK’s BTwhich says it won’t be using Huawei equipment in the heart of its 5G mobile network when it is rolled out in the UK (although it does still plan to use Huawei’s mast antennas and other products).
There’s no evidence of Huawei having ever been engaged in any spying or handing over of data to the Chinese government. In fact, whenever I talk to Huawei executives privately they tell me how frustrated they are because of how the US government and Western media unfairly paints them as a Chinese state-owned company that does Beijing’s bidding.
Company sources tell me that Huawei should be seen as the modern, dynamic and law-abiding global firm that it is, and that the US’s narrative is flawed and unfounded.
Still, Huawei’s founder, the father of Ms Meng, is Ren Zhengfei – a former military officer in the Chinese army. And the fact remains, as Mr Zaagman points out in a recent piece for The Lowy Institute, “the firm’s relationship with the Chinese People’s Liberation Army remains an issue of concern and opacity”.
Which is why the US says countries must be wary of Chinese companies like Huawei. Under China’s laws, private companies and individuals may be obliged to hand over information or data to the government if they are indeed asked.
It’s that possibility, government sources say, that is scaring them off doing business with Huawei.
Huawei has told me this is completely untrue, and other Chinese academics and business people have also rejected this notion.
Mr Hu of the Global Times agrees: “The Chinese government would not do this. China would not hurt its own enterprises. If it hurts its own companies, how would it benefit the country? Even if a middling or low-level official were to ask it, Huawei will have the power to refuse any kind of government request.”
Many in China will see this as yet another attempt to contain the country’s rise, by limiting its most global firms’ access to international markets.
“This could further endanger Huawei’s 5G aspirations outside of emerging markets,” says Tony Nash of Complete Intelligence, on the line from the US.
“If Huawei is being investigated it could put both Huawei and ZTE on the back foot as other equipment makers gain a lead in North America, and potentially other developed markets.”
It’s not just developed markets where Huawei may be losing ground. The scrutiny is building in emerging markets too. Industry sources tell me that the US has been putting pressure on Asian allies to stop them from using Huawei’s equipment. The Solomon Islands and Papua New Guinea were the latest recipients of this pressure, and India is thought to be next.
So what does this mean? The gloves are off. You should be under no illusion what this latest move by the US means for the relationship between the world’s two largest economies: things have taken a dramatic turn for the worse.