B.C.’s forestry trade mission to China is the latest casualty in the escalating dispute between China and Canada over the arrest of Meng Wanzhou, the chief financial officer of tech giant Huawei.

“The Province of British Columbia has suspended the China leg of its Asian forestry trade mission due to the international judicial process underway relating to a senior official at Huawei Technologies Co., Ltd.,” said Bruce Ralston, Minister of jobs, Trade and Technology in a statement issued on Sunday.

Wanzhou, the chief financial officer of the China-based Huawei Technologies, was arrested Dec. 1 at Vancouver International Airport while en route to Mexico and is being sought for extradition to the U.S. on allegations of fraud.

It’s alleged the Chinese tech giant used a subsidiary named Skycom to conduct business with an Iranian telecommunications company, a violation of U.S. sanctions against trade with Iran. Meng is accused of misrepresenting Huawei’s connection with Skycom to several banks involved in the case, leading to one bank clearing more than $100 million dollars worth of transactions.

The 2018 forestry trade mission led by Forest Minister Doug Donaldson included some 40 company executives, civil servants and Indigenous leaders in an full-court sales press to open new markets for the forestry industry.

This blow to B.C.’s efforts to bolster forestry trade with China is an escalation of the crisis, said Yves Tiberghien, UBC political science professor and Director Emeritus, Institute of Asian Research, who spoke to Postmedia from Japan.

“We are entering a rough patch in China-Canada relations,” said Tiberghien.

Ralston was not available to answer questions on Sunday, so it is still unknown who pulled the plug on the trade visit to China, but Tiberghien suggested the decision was most likely mutual.

“Any official meeting between China and Canada at this time would not be fruitful at the moment,” said Tiberghien.

“The media in China is furious and China is taking (the arrest of Meng Wanzhou) very badly. It’s like arresting Bill Gates or Mark Zuckerberg.”

Tiberghien added that “the cost to Canada could be very high.”

On Saturday the Chinese Foreign Ministry summoned the Canadian Ambassador to China John McCallum to express their displeasure with the arrest of Wanzhou. The diplomatic measures could be followed by more political and business sanctions.

In a worst-case-scenario, retaliation could include arrests of Canadians in China, said Tiberghien, although “China will be careful because they want to keep the moral high ground.”

Tiberghien said the timing of the arrest — just days after Donald Trump’s meeting with Xi Jinping at the G-20 summit, the secrecy of the warrant, and the targeting of a high-level executive — has contributed to the perception in China that the case is less about sanctions than it is about attacking the telecom giant Huawei.

Although Canada is following their bilateral legal co-operation process and extradition agreement with the U.S., “China sees this as a political case based on geopolitics, and Canada is caught in the middle,” said Tiberghien.

Meng, whose father is the founder of the company, returns to court on Monday to continue seeking bail. She was arrested using a provisional arrest warrant issued by a New York state judge in August.

A federal Justice Department lawyer had argued that Meng’s vast resources and lack of meaningful connection to Canada made her a flight risk, while Meng’s defence lawyer said she would do no such thing to prevent humiliation to her family.

The cancelled Chinese meetings will be rescheduled “at the earliest convenient moment,” according to Ralston’s statement.

dryan@postmedia.com

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