A Huawei Technologies signboard in Shenzhen, China. Picture: REUTERS/TYRONE SIU
A Huawei Technologies signboard in Shenzhen, China. Picture: REUTERS/TYRONE SIU

Executives at major US companies fear China may retaliate against US firms and their executives following the arrest last week of a top executive of Huawei in Canada.

At a closed-door security meeting of US companies in Singapore on Thursday, one topic was high on the agenda: the arrest of the Huawei executive and the potential backlash on US firms operating in China.

Officials from major US companies who attended the event, a scheduled meeting of the local chapter of the US department of state’s overseas security advisory council (Osac), voiced concerns about retaliation against US firms and their executives, two people with knowledge of the meeting said.

A number of attendees said their companies are considering restricting non-essential China travel and looking to move meetings outside the country, one of the people added.

Security executives for companies including Walt Disney, Alphabet’s Google, Facebook, and PayPal Holdings attended the meeting, according to the sources and a LinkedIn posting by one of the attendees.

The companies all declined to comment or did not respond to requests for comment prior to publication.

Following publication of this story, Google spokesperson Taj Meadows said it “misrepresents” events at the meeting. He asserted there was “no discussion on the record or behind closed doors about the arrest of a top Huawei executive or about American companies operating in China”.

Meadows also said he was not at the meeting and cannot say whether attendees discussed China travel informally.

The discussions at the meeting underscore concerns rippling through US businesses in the world’s second-largest economy, already facing a delicate balancing act amid a tense trade standoff between Washington and Beijing.

The formal agenda for the meeting, held at Google’s Asia-Pacific headquarters in Singapore, included presentations on economic crime and terrorism in the region. Osac promotes “security co-operation between US private sector interests worldwide and the US department of state”, according to its website.

But informal conversations among attendees soon turned to possible risks in China prompted by the arrest of Meng Wanzhou, the CFO and “heiress” of Chinese telecom network equipment giant Huawei Technologies who was detained in Canada on December 1. The news of the arrest was made public on Wednesday.

Meng, the daughter of Huawei’s founder, was held at Washington’s request as part of a US investigation of an alleged scheme to use the global banking system to evade US sanctions against Iran, people familiar with the probe said.

The arrest has roiled global markets amid fears it could further inflame the Sino-US trade row.

Risk consultants and analysts said the arrest could prompt Beijing to retaliate in some form.

“This will pressure a lot of Chinese officials to look strong in this dispute,” said Nick Marro, Hong Kong-based Asia analyst at the Economist Intelligence Unit, who added that technology companies are particularly at risk.

“This could mean either taking a stronger stance on trade negotiations or taking a stronger stance on US tech firms in China right now.”

Asked whether there will be any retaliation against any foreign executives in China, foreign ministry spokesperson Geng Shuang said on Friday China has always protected the lawful rights of foreigners in China in accordance with the law.

“Of course in China, they should respect China’s laws and rules.”

Hot topic at meeting 

Osac says it is made up of 34 private and public sector member organisations. It lists its events on its website, including the December 6 meeting in Singapore. A separate listed meeting was held in Shanghai on the same day.

Prashant Nayak, Disney’s Asia Pacific director of corporate security, posted about the Singapore meeting on LinkedIn, tagging other executives at Google, Facebook, Amazon.com, Marriot International, Microsoft and others. Nayak did not respond to a LinkedIn message seeking further comment.

The second person with knowledge of the event said the Huawei arrest and potential fallout was a hot topic at the meeting.

A senior diplomat from the US embassy in Singapore gave opening remarks, but an embassy spokesperson said she left before any discussion.

Asia-based risk consultants said they have seen a rise in the number of clients asking about the Huawei issue and potential concerns related to the impact on US firms in China.

Jakob Korslund, CEO of Singapore-based consultancy Deutsche Risk, said his firm has received a number of inquiries in the last two days asking about the risks of travelling to China.

“For a few we have advised postponing trips that were not time critical, telling clients to wait for the next few weeks to see the situation,” he said.

James McGregor, chair of Apco Worldwide’s Greater China region, said companies will likely err on the side of not sending executives to China for the time being.

“It’s all about avoiding risk, because what do you do if somebody is arrested?” he said, adding anxiety is also spreading among executives already in China.

“People are joking about it a little bit and saying —‘maybe I should take an early Christmas trip home’.”