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Wenran Jiang is a senior fellow at the School of Public Policy & Global Affairs, University of British Columbia, and a global fellow at the Woodrow Wilson International Center for Scholars in Washington D.C.

The Canadian arrest of Meng Wanzhou, deputy board chair and CFO of Huawei, following the U.S. request for potential extradition to face criminal charges, is a shocking and unprecedented development.

This is shocking because Ms. Meng was in transit in Vancouver when she was detained, which indicates a well-co-ordinated move by the Canadian and U.S. authorities. This is unprecedented because Canada has taken a high profile Chinese senior executive on its own soil, not for violating any Canadian law, but for potentially violating U.S.-imposed sanctions against Iran, which in itself is very controversial.

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But all sides should take a deep breath right now and tread carefully before things snowball out of control, doing permanent damage to a delicate Canada-China-U.S. relationship.

No doubt, the move is an escalation of the ongoing efforts by the United States to ban Huawei products, not only in the American market but also among its allies, based on security concerns. In its previous case against China’s second largest communications equipment producer, ZTE, on Iran sanctions, the U.S. Department of Commerce took the lead in a civil litigation. But Ms. Meng’s extradition request was made by the U.S Department of Justice, based in Brooklyn. And it is only in a criminal investigation procedure that Canada is obliged to consider the case, thus it was a much more serious development than the treatment of ZTE. This partly explains the very cautious and moderate initial response from Huawei.

While there is open celebration south of the border, Ms. Meng’s arrest has also pleased Canadian intelligence agencies, which have regarded China as a hostile adversary and have long lobbied for the rejection of Huawei’s presence in Canada. In addition, BT, the U.K. telecom giant, just announced that it will stop using Huawei equipment in British networks, thus putting more pressure on the Trudeau government to forbid Huawei from participating in Canada’s 5G telecommunications network.

The Chinese government and the public in general have not taken the arrest lightly. The Chinese Embassy in Ottawa swiftly issued a statement, calling on Canada and the U.S. “to immediately correct the wrongdoing and restore the personal freedom of Ms. Meng Wanzhou.” Chinese social media networks were exploding with rage, showing an overwhelming consensus that this is just another step the U.S. government is taking to contain China’s rise. Many Chinese citizens have shown disdain over Canada aiding the U.S. in such an effort.

Hu Xijin, the outspoken editor of China’s Global Times, a tabloid affiliated with the People’s Daily, went on Twitter to accuse the United States of resorting to dirty tricks after being unable to beat Huawai through competition: “The U.S. can’t beat Huawei in the market. Don’t act like a despicable rogue.”

Ms. Meng’s extradition bail hearing is set for Friday, putting the Canadian government in a tough spot. If the proceeding concludes that the U.S. has not provided enough evidence and frees Ms. Meng, there will be relief for an already strained Canada-China relationship. But the U.S. side will be very disappointed with Canada. If Ms. Meng is being handed over to the U.S. authorities to face criminal charges without providing a convincing explanation to Huawei and the Chinese government, then China’s relations with both Canada and the United States will likely enter into a very uncertain and critical situation.

While Ottawa will continue to argue that it is simply following a legal procedure and defer the case to the justice system, it should not underestimate Beijing’s resolve in protecting Huawei against what is perceived in China as yet another Western strike aimed at one of its leading tech companies.

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But the Chinese government and the general public would also be wise to take a step back and wait for details on what exactly the case is against Ms. Meng and Huawei before jumping to conclusions that may not serve the best interest of all the parties involved.

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