Huawei arrest not political

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Jane Wolsak/CP Meng Wanzhou speaks to her lawyer David Martin during a bail hearing at B.C. Supreme Court in Vancouver, on December 10, 2018.

She faces United States accusations of misleading multinational banks about Huawei's control of a company operating in Iran, putting the banks at risk of violating U.S. sanctions, and incurring severe penalties, court documents said.

The US alleges that Huawei used a Hong Kong shell company to sell equipment in Iran in violation of US sanctions.

It said in a statement that Vice Premier Liu He spoke with US Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer.

The federal government is considering increasing the risk level for Canadian travellers to China, CTV News has learned.

However, this approach reportedly might backfire on the USA considering that high-profile tech executives and others with ties to China's Ministry of State Security have become a target for investigation.

In a sign that the criminal case may not have derailed the detente, however, top Chinese and USA negotiators spoke by telephone to discuss the timetable of trade talks, the Chinese commerce ministry said.

Donald Trump's envoy to Canada says China's rise might have worrying implications for North American workers but she says the USA pursuit of of a Huawei executive is a separate legal matter.

China, which insists Meng has not violated any laws, had threatened severe consequences unless Canada released the Huawei executive.

Minister Ralph Goodale said Tuesday the government is sparing no effort to look after the Canadian's safety.

Meng's lawyer, David Martin, found a number of friends and associates to vouch for his client's character and to offer financial guarantees that she will not flee.

Her husband Liu Xiaozong presented two Vancouver homes and Can$1 million in cash - for a total value of Can$15 million - as a surety for his wife's release.

Michael Kovrig's current employer, the International Crisis Group, said it was working for his prompt release. "I would be very surprised if there's valid reason for detention", Conservative MP Erin O'Toole said, while Conservative MP Lisa Raitt expressed concern that Kovrig's arrest is about "payback".

Justice William Ehrcke, presiding judge of the Supreme Court of British Columbia, ruled Tuesday afternoon that Meng could be released on a Can$10 million ($7.5 million) surety, including a cash deposit of Can$7 million, and on the condition that she remain in Vancouver, where she owns two homes, while she awaits extradition proceedings on USA fraud charges.

The Global Times and the China Daily said that Meng had been handcuffed and wore ankle restraints.

In an affidavit released Sunday, Meng made her case for release.

Meng, 46, is requesting bail on grounds that she is in poor health and has close ties to Vancouver.

Canada had been bracing for retaliation for Meng' arrest.

But a legal battle in Canada between China and the USA provides a warning of how hard that balancing act can be.

The arrest of Meng has put a further dampener on Chinese relations with the United States and Canada at a time when tensions were already high over an ongoing trade war and USA accusations of Chinese spying.

Huawei is the world's largest supplier of telecommunications network equipment and second-biggest maker of smartphones, with revenue of about $92 billion previous year. But Trump agreed to postpone those by 90 days while the two sides negotiate.

The judge said Meng was arrested on a provisional warrant, and the USA has not yet completed documentation on its official extradition request.

Huawei said in a statement that it had "every confidence that the Canadian and USA legal systems will reach a just conclusion".