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Ever since Huawei CFO Meng Wanzhou landed at Vancouver’s YVR airport at 11:30 a.m. on Dec. 1 to catch a connecting flight to Mexico, Canada has been placed in the middle of a battle between the world’s two greatest powers.

Meng, 46, is at the centre of allegations that Huawei, a Chinese telecommunications giant linked to China’s People’s Liberation Army, has used a Hong Kong shell company known as Skycom to do business with Iran, defying U.S. sanctions against the Islamic Republic. Huawei denies the allegations.

The United States alleges Meng has been avoiding travel to the country ever since she learned of investigations into her business dealings. But when Meng landed in Vancouver and tried to pass Canadian customs on Dec. 1, she was flagged for detention and arrested by the RCMP, as the U.S. had filed proceedings for an extradition request with Canada.

Now, a high-stakes game of politics, espionage and covert surveillance operations is playing out in Vancouver, where Meng, one of China’s most powerful executives, was released on bail after a three-day hearing that was followed by media outlets worldwide.

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READ MORE: Huawei CFO Meng Wanzhou granted bail, will live in Vancouver under electronic surveillance

Sources in law enforcement and government provided accounts of the unfolding events in British Columbia, a case that experts say has triggered a serious international crisis for Canada.

Already, China has apparently retaliated for Meng’s arrest by detaining two Canadians on national security charges, former Canadian ambassadors to China and CSIS employees say. And China has promised further revenge.

However, Minister of Foreign Affairs Chrystia Freeland told reporters Friday that China has drawn no connection between the arrests and the extradition of Meng.

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Sources in this story could not be identified because of the sensitive nature of the information they provided.

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At 8:30 a.m. Tuesday, while media outlets from around the world prepared to attend a Vancouver court hearing that would decide where Meng should stay during the pending extradition hearing — in one of her two luxurious homes in Vancouver or in jail — some elite RCMP officers already believed they had the answer.

A source told Global News the officers were saying Meng would be released later that day. They were right: Tuesday afternoon, Justice William Ehrcke released Meng on a $10-million security. Later that night, as media cameras crowded around, Meng was escorted in a protective embrace to a black Cadillac Escalade SUV by Scot Filer, a respected former RCMP geographic profiler with business experience in China, and the CEO of Lions Gate Risk Management, the private firm handling Meng’s security while she’s out on bail.

A vehicle is seen outside of Huawei CFO Meng Wanzhou’s home in Vancouver on Wednesday, Dec. 12, 2018. THE CANADIAN PRESS/Jonathan Hayward. THE CANADIAN PRESS/Jonathan Hayward

A source said that while some of Canada’s business leaders have suggested the country was wrong to arrest Meng because of the political and economic consequences as well as the damage China has promised to inflict, it was never an option to let her continue on her travels to Mexico, where she reportedly planned to conduct business for Huawei.

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Extradition requests from the United States are a standard, daily occurrence to be handled by Department of Justice Canada officials, a law enforcement source familiar with the Meng case and the general process said. As long as the evidence and allegations filed by an extradition treaty partner are in order, a suspect will be detained and enter the hearing process, and there will never be political interference, the source said.

Meng has two Vancouver homes worth $22 million in total. Now that she is living in one of the homes, RCMP officers are conducting covert surveillance operations in the area at night, a source said. This is to make sure that Meng doesn’t attempt to flee Canada and to monitor whether Chinese state agents attempt to contact her, according to a source.

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At this time, since Meng has few friends in Vancouver; it is only neighbours attending her home, a source said.

Agents of China’s powerful Ministry of State Security, which protects China’s national interests and conducts intelligence operations in foreign lands, are also believed to be covertly monitoring Meng, a source said. And while crowds of Meng’s supporters protested for her release this week outside a downtown Vancouver court, MSS agents were also believed to be monitoring the events.

“Absolutely, the MSS are here (watching Meng) in Vancouver,” one source said. Tweet This

Supporters hold signs and a Chinese flag outside B.C. Supreme Court during the third day of a bail hearing for Meng Wanzhou, the chief financial officer of Huawei Technologies, in Vancouver, on Tuesday, Dec. 11, 2018. THE CANADIAN PRESS/Darryl Dyck. THE CANADIAN PRESS/Darryl Dyck

The RCMP did not directly answer questions for this story nor deny information provided to Global News.

In a statement, the RCMP said: “Under the terms of a consular agreement between Canada and the People’s Republic of China, the RCMP contacted Chinese consulates in Vancouver and Ottawa within hours of the arrest.”

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Stephanie Carvin, a Carleton University professor and former strategic analyst for CSIS who was not involved in tactical operations, said China has “robust” global spy networks, and it would make sense for MSS agents in British Columbia to be conducting operations to protect China’s national interests.

“Huawei is not a normal company in any sense,” Carvin said. “It is wrapped up in Chinese nationality and represents (Chinese President) Xi Jinping’s interests as a national champion company. It doesn’t surprise me the Chinese state is taking a huge interest (in Meng’s case in British Columbia) and retaliating with these two kidnappings of Canadians in China.”

Carvin said that while the RCMP is not usually the lead agency in Canada’s counter-intelligence operations, it would make sense that the RCMP “wants to keep track of who is coming and going from Meng’s residence.”

WATCH: Supporters of Huawei and Meng Wanzhou protest for her release outside a Vancouver court house.

2:31 Meng Wanzhou supporters call for her release outside Vancouver courthouse Meng Wanzhou supporters call for her release outside Vancouver courthouse

Meanwhile, according to B.C. political sources, there was high-level interest within the provincial government about Meng’s detention conditions.

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State media in China have charged that Meng’s arrest was an affront to her dignity and human rights. In an editorial titled “Canada’s treatment of Meng Wanzhou in violation of human rights,” the Global Times claimed that Meng was “immediately handcuffed at the airport and taken to a detention facility…subjected to rude and degrading treatment…put into restraining devices used on felons.”

A source claimed that while Meng’s initial detention and bail proceedings played out, B.C. Premier John Horgan’s chief of staff Geoff Meggs allegedly took an interest in where and how Meng was detained. The source said Meggs reportedly had a call made to the office of B.C. Solicitor General Mike Farnworth “expressing concern that they could not hold Meng in a Canada Border Services facility…(and saying Farnworth) needs to make sure she is extended courtesies.”

Meng was detained before her release at B.C.’s Alouette Correctional Centre for Women in Maple Ridge. The CBSA did not immediately respond to requests for comment on the case.

The reported contact from the premier’s office to Farnworth was seen as “odd,” according to a source with knowledge of the case.

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Meggs was not available for an interview. However, in response to requests for comment from Global News, a spokeswoman from the premier’s office said it was “our communications director (that) made an informational request about what had been reported in media about Ms. Meng.”

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In an emailed response, a spokeswoman for Farnworth said: “The premier’s communications director contacted the solicitor general’s office to simply gain clarity on what was being reported on this investigation. This is standard procedure. This was a request for information only — there was no request for any change in circumstances.”

Meanwhile, in the aftermath of China’s detention of former Canadian diplomat Michael Kovrig and businessman Michael Spavor, a source with knowledge of Canadian relations with China said that Canada should expect China to carry out threats of revenge. It has been reported that China’s MSS is handling the cases of both Kovrig and Spavor.

“The Chinese don’t just say threats,” a source said. “This would be all planned out from Beijing beforehand. If they say they will do something, they are going to do it.”

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Canada is currently considering whether to take further action, such as issuing travel advisories for China, a source said. A B.C. trade mission to China has already been cancelled, and on Friday, federal Tourism Minister Melanie Joly reversed her position from Thursday, deciding to postpone a trip to China.

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The situation is so volatile, a source said, that the RCMP is also considering cancelling an international police training mission to China’s mainland that is scheduled for early 2019.

sam.cooper@globalnews.ca