The dramatic arrest in Canada of a top Chinese technology executive for possible extradition to the United States has sent stock markets plummeting and cast doubt on a recent US-China trade truce.

Key points: Meng Wanzhou has been with Huawei for 25 years and is seen as a future chief

Meng Wanzhou has been with Huawei for 25 years and is seen as a future chief Huawei operates in 170 countries, servicing more than a third of the world's population

Huawei operates in 170 countries, servicing more than a third of the world's population US intelligence agencies have warned people not to buy Huawei products due to concerns about spying

Canadian Prime Minister Justin Trudeau said his Government had no involvement in the arrest of Meng Wanzhou and he had not spoken to international counterparts about the case.

"The appropriate authorities took the decisions in this case without any political involvement or interference … we were advised by them with a few days' notice that this was in the works," Mr Trudeau said.

Chinese authorities have demanded the immediate release of Ms Meng and say she has done nothing wrong.

Reports say Ms Meng is facing extradition to the US on suspicion she violated US sanctions against Iran.

But what exactly is Huawei and why does it seem like it's continually being targeted by foreign governments?

Who is Meng Wanzhou?

Meng Wanzhou is one of the vice-chairs on Huawei's board and the daughter of company founder Ren Zhengfei. ( Supplied: Huawei.com )

Meng Wanzhou is part of the top echelons of Huawei: she is one of the vice-chairs on Huawei's board and the daughter of company founder Ren Zhengfei.

She is the chief financial officer and is seen as a future chief of the tech giant.

Ms Meng has been at Huawei for 25 years and first started with reception duties.

How big is Huawei?

Huawei is a multinational Chinese telecommunications and electronics company founded in 1987 and based in Shenzhen.

It says it operates in more than 170 countries, has 180,000 employees and serves more than a third of the world's population.

Huawei builds telecommunication networks, makes smartphones and delivers cloud services, among many things.

In the second quarter of this year Huawei moved ahead of Apple in smartphone shipments, having sent more than 50 million phones around the world.

What are the concerns with Huawei?

Earlier this year the Australian Government banned Huawei from taking part in the rollout of 5G mobile infrastructure over national security concerns.

It was banned because the company was "likely subject to extrajudicial directions from a foreign government that conflict with Australian law".

New Zealand's international spy agency also followed Australia's lead, banning the use of Huawei equipment in its planned 5G upgrade, saying it posed a "significant network security risk".

Britain's BT Group is also removing Huawei equipment from its networks, Washington has taken a series of steps to restrict Huawei in the US, and the European Union's technology commissioner said the EU should also be worried about Huawei and other Chinese technology companies.

The company is said to be employee-owned but there has long been speculation about Huawei's links to the Chinese Government.

The founder and CEO of the company, Ren Zhengfei, is a communist party member and when he joined the party said it was expected that all "exceptional" people should do so.

Why is Huawei being targeted by foreign governments?

There has long been concern that Huawei is not that separated from some of the Chinese security apparatus and there are suggestions its equipment could be used for spying.

Experts say if Huawei technology was used to build Australia's 5G network there would be security risks.

Sorry, this video has expired Trudeau says Huawei arrest not politically motivated

"The biggest concern is, whether they want to do it or not, they can be compelled by the Chinese Communist Party to spy and conduct espionage on the Chinese Communist Party's behalf," Fergus Hanson from the Australian Strategic Policy Institute told the ABC's PM program.

"There's laws … in China that require all Chinese companies to participate in state espionage if they're ordered to do so."

Huawei denies it poses any security risk and says it abides by the laws of each country.

Should people be wary about using Huawei?

According to US intelligence, the answer is yes.

Earlier this year at a US Senate Intelligence Committee hearing, heads of major intelligence bodies, including the FBI, CIA and NSA, warned that Americans should not purchase Huawei products, citing concerns about their use as spying devices.

Nigel Inkster, a senior advisor at The International Institute for Strategic Studies and 30-year veteran with British intelligence service MI6, told the RN Breakfast program that "there clearly are risks" with using Huawei equipment, even if those risks are hard to define.

"There clearly are vulnerabilities, because Huawei at the end of the day, although it takes great pride in being a private corporation and I believe genuinely wants to be one … has to do what the Chinese Communist Party tells it to do," Mr Inkster told Breakfast's Fran Kelly.

"So there is always a risk that Huawei will in certain circumstances be co-opted by the Chinese state to do things that it does not want to."

But Huawei is not alone in having to deal with privacy troubles.

In October the New York Times revealed that US President Donald Trump has been repeatedly warned by his top aides to stop using his personal iPhone, due to its vulnerability to being hacked by Chinese and Russian spies.

In response to the article, Chinese Foreign Ministry spokeswoman Hua Chunying dismissed the claims and suggested that "if they are really very worried about Apple phones being bugged, then they can change to using Huawei", instead.

What's likely to be the fallout of Meng Wanzhou's arrest?

Sorry, this video has expired The Chinese Foreign Ministry says Beijing wants answers from the US and Canada

The arrest of a senior official in a company Beijing sees as the crown jewel of its tech companies came less than a week after China and the US agreed to a 90-day truce after months of tit-for-tat trade tariffs, fuelling market concerns about whether the US and China could agree on a permanent trade deal before the trade ceasefire ends on March 1.

David Mulroney, a former Canadian ambassador to China, said US and Canadian business executives could also face reprisals in China.

"That's something we should be watching out for. It's a possibility. China plays rough," Mr Mulroney said.

He predicted a crisis in relations between the three countries if Ms Meng was extradited and said any talk of a free trade agreement between Canada and China would be over.

In terms of Huawei, the arrest is the latest in a long string of setbacks for the company and might hurt its image in western countries.

There is a chance Ms Meng's arrest could end talks of a free trade agreement between Canada and China. ( Reuters )

ABC/Wires