As Canada frees a Huawei boss, China lets two Canadians out of jail

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IN THE end all pretence about China’s jailing of two Canadian citizens in December 2018 was abandoned. They were hostages after all. Michael Kovrig and Michael Spavor had been detained nine days after Meng Wanzhou, a Huawei executive, was taken into custody in Canada on behalf of America on charges related to the alleged violation of Iran sanctions. On Saturday morning in China, 1,020 days later, the “two Michaels”, as they became known, were freed from prison and boarded a plane to Canada, just as Ms Meng was flying from Vancouver to China. Hours earlier, a federal judge had approved a plea deal struck between Ms Meng and American prosecutors. So hostage diplomacy ended with a cold war-style prisoner exchange, with the skies between China and Canada serving as the frontier bridge.

The dramatic closing act of the two-Michaels affair began shortly before 2pm Friday in Brooklyn, when Ms Meng, the 49-year-old chief financial officer of Huawei and daughter of the founder of the telecoms company, appeared virtually in a federal court to enter her plea agreement. In exchange for a deferral of prosecution, Ms Meng admitted to what the Justice Department said were “material misrepresentations” about Huawei’s business in Iran, a target of American sanctions, in an effort to preserve one of the company’s banking relationships.

The Justice Department said Ms Meng had confirmed “the crux” of their case, which was that she and her colleagues at Huawei “engaged in a concerted effort to deceive global financial institutions, the US government and the public about Huawei’s activities in Iran.” Three hours later, in British Columbia, a judge freed Ms Meng from the very loose form of house arrest she had been serving while fighting extradition to America. She and the two Michaels (accompanied by Dominic Barton, Canada’s ambassador to China) were all airborne and in international airspace at about the same time—5.30pm Vancouver time on Friday, 8.30am China time on Saturday.

Much remains unclear about the terms of the exchange—in particular how much was said explicitly by representatives of the three countries in negotiations and how much was only winked at. From the outset both American and Canadian officials have been bedevilled by the problem of not wanting to appear to negotiate for the release of hostages. Some China hawks in America and Canada will accuse President Joe Biden and Prime Minister Justin Trudeau of rewarding China’s tactics, and of going soft by agreeing to let Ms Meng go free. The resolution comes just days after Mr Trudeau narrowly secured victory in parliamentary elections. He had rejected entreaties to order Ms Meng released much earlier, on the reasoning that to subvert the judicial process would show China how easily it could gain leverage over Canada. As for America, Donald Trump’s Justice Department had entered similar negotiations with Ms Meng in 2020, and the published terms of the agreed plea—most crucially, that she must admit wrongdoing—appear much the same as what prosecutors were believed to be offering under Mr Trump late last year.

Canadian authorities had initially detained Ms Meng at the request of the Justice Department on December 1st, 2018, while she was in transit at Vancouver International Airport. Nine days later the two Michaels were detained by Chinese authorities, supposedly on suspicion of “endangering state security”, spurring an international outcry. In March this year they were each tried on espionage-related charges in separate trials. Mr Spavor, who had conducted business in North Korea—including helping to arrange visits by Dennis Rodman, a basketball player, to meet Kim Jong Un, North Korea’s ruler—was convicted and sentenced in August to 11 years in prison. No verdict had been announced for Mr Kovrig, a former Canadian diplomat who was working in Beijing for the International Crisis Group, a non-governmental organisation.

The sentencing of Mr Spavor took place as Ms Meng was going through another round of court hearings in Canada in her years-long extradition battle. It was yet another indication of the elaborate double game operating in all three countries: the formal legal process and the informal, political process. (Mr Spavor’s trial in March took place as two senior Chinese envoys were in Alaska for a tense summit with Antony Blinken, the American secretary of state, and Jake Sullivan, the national security adviser.) Some former ministers and diplomats in Canada had called for a political deal to be struck in which all three were released. Chinese diplomats had come close to saying the same, pinning the blame for the sorry state of Canada-China relations on the detention of Ms Meng, which they had repeatedly called unjust: “Whoever tied the knot is responsible for untying it,” Zhao Lijian, a foreign ministry spokesman, said in 2020.

Chinese officials may well conclude that hostage-taking works. Under Xi Jinping, China’s leader, the Communist Party has adopted an increasingly aggressive approach with countries that give offence (by, say, calling for an investigation of the origins of the coronavirus, or, in Canada’s case, detaining Ms Meng). Many smaller countries like Canada have felt they lack the diplomatic and economic heft to push back. While the two Michaels languished in prison, Ms Meng was treated delicately during her extradition fight, living in a mansion and allowed excursions to concerts and to go shopping (albeit with a GPS tracker). Mr Trudeau was criticised for pulling his punches with China, choosing not to retaliate when China imposed a de facto ban on some Canadian imports, declining (so far) to formally ban Huawei from the country’s 5G networks, and resisting calls from Parliament to join America in applying the label of genocide to the Communist Party’s systematic repression of Uyghurs, a predominantly Muslim ethnic group. And in the end Ms Meng was freed.

But the Communist Party’s bullying has come at a diplomatic and strategic cost. In February, Canada led a coalition of nearly 60 countries in denouncing arbitrary state detentions of citizens—an obvious shot at China, though it was not explicitly named in the joint declaration. It was another example of countries coalescing around various concerns about China’s behaviour in recent years under Mr Xi. The recent AUKUS security agreement between Australia, Britain and America is the latest, most dramatic example. Governments around the world are becoming much more wary of China. The taking of the two Michaels—and the eventual confirmation that they were indeed hostages to be exchanged— will be viewed in history as one of the reasons why.