China suspects FedEx of breaking more laws over Huawei packages

China suspects FedEx of breaking more laws over Huawei packages

FedEx is suspected of breaking more Chinese laws over its failure to deliver packages to telecommunications equipment maker Huawei, following an investigation into the US parcel delivery service.

The Xinhua news agency said on Friday that investigators had found “clues” that indicated the US company had violated “other laws”.

In June, Xinhua reported that Beijing authorities were investigating FedEx for “undermining the legitimate rights and interests” of Chinese clients.

The probe, followed by an announcement that China would launch a list of unreliable foreign companies, has been viewed as retaliation for an effective ban on Huawei products in the US.

Authorities had conducted an investigation into FedEx and found that it had not delivered more than 100 packages connected to Huawei, according to Xinhua.

FedEx could not be immediately reached for comment.

The logistics company’s explanation that the failure to deliver was due to an operational error “was not in line with the facts”, Xinhua said. FedEx apologised in June for misrouting the packages after Huawei said articles sent from Japan were diverted to the US rather than to intended destinations in China. 

The trade dispute, in which both the US and China have levied hundreds of billions of dollars in tariffs on one another, has demonstrated the potential to engulf companies and individuals loosely connected to the hostilities.

Two Canadian citizens — Michael Kovrig, a former diplomat who worked for International Crisis Group, and Michael Spavor, who arranged tours into North Korea — were detained in China in late 2018 shortly after Canadian authorities arrested Huawei chief financial officer Meng Wanzhou following a US extradition request.

The pair were formally arrested in May on charges including stealing and illegally providing state secrets, and spying and gathering intelligence on state secrets.

China’s actions have been widely viewed as retaliation for the arrest of Ms Meng, and have sent a chill through the foreign business community over fears that political disputes between Beijing and other countries could result in the arbitrary detention of foreign citizens.

News of China creating an “unreliables list” of foreign companies has also spooked foreign groups operating in China.

Although the list was announced just days after the investigation into FedEx, no companies have been formally added to it, and it is unclear what repercussions a group would face if it was listed.

“The unreliable list system is under process and will be released soon,” a commerce ministry spokesman said on Friday.

Additional reporting by Xinning Liu in Beijing

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