Editor's note: Liu Shengjun is the president of China Academy of Financial Research. This article is an edited translation of a commentary that first appeared on the WeChat account "caijingknowledge" on December 14, 2018. This article reflects the author's opinion, and not necessarily the views of CGTN.

The Meng Wanzhou case has drawn global attention since coming to surface. Unfortunately, many netizens still have illusions about "the rule of law" in the United States and Canada, and believe that good people will not be wronged.

The key misconception that causes the illusion is that Western countries are ruled by law. However, this rule of law only works for citizens and domestic affairs of these countries. The rule of law has to give way to national interests once a case transcends national boundaries and matters to national interests.

Britain established the concept of the rule of law during the Glorious Revolution in 1688, but no British or American soldiers were "ruled by law" when they invaded China, indulged themselves in killing and plundering, and burned down the Summer Palace. They were not bound by the rule of law because they were not hurting their own nationals, and they did so in the interests of the Britain and the United States. From the Iraq war to the dismemberment of a Saudi journalist, reality has shown repeatedly that "the rule of law being secondary to national interests" will never change.

The U.S. and Canada's joint plot of arresting "Huawei's Princess" marks an egregious misjudgment and a terrible political mistake.

First miscalculation: Overlooking the possible damage to the U.S. and Canada

Zachary Karabell, an American scholar, stated in his Washington Post article "Prosecuting the Chinese Huawei Executive Is an Idiotic Way to Hold China in Check" that the U.S. hegemonic diplomacy "works, however, primarily where there are stark power imbalances, which is clearly not the case with China."

This will not only complicate the already difficult China-U.S. trade negotiations, but even cause America and Canada to face retaliations from China. Using law enforcement against individuals for corporate actions of this sort risks backfiring spectacularly.

It is easily painted as a crude attempt by the Trump administration to put pressure on Beijing in the coming trade negotiations. It exposes American executives to potential retaliation in China and abroad in a tit-for-tat that will chill an already frosty business climate, with direct effects on the domestic American economy and markets.

Second miscalculation: Huawei is not ZTE

With an overwhelming success in campaigning against ZTE, the United States seems to think that they can easily do the same with Huawei. But the response of the Chinese government and people is far from what the United States and Canada had expected. There are three reasons:

Since Huawei is China's "national pride" and the "crown jewel of China's high technology," the Huawei episode has stirred up patriotic sentiments over the fate of China. If the U.S. only imposed fines on Huawei as those on ZTE, the Chinese public would have felt disappointed rather than irritated and agitated. By nature, arresting a Chinese national is quite different from financial punishment.

In the minds of Chinese people, even if it is a high-street fist fight, there are basic rules of engagement that separate right from wrong. Each side needs to beat the other fair and square and not resort to low blows. Otherwise, even if one wins, they will be despised.

Third Miscalculation: The arrest damages the American soft power of rule of law

In management, leadership derives not only from "hard power" but also from "soft power" centered on attraction and recognition. The reason why the United States has become a world leader is, fundamentally speaking, because of its "soft power," especially the rule of law. However, arresting Meng Wanzhou has seriously undermined the international image of the "U.S. rule of law."

The U.S. has ordered the witch-hunt because it fears Huawei's 5G technology. It's merely an excuse to accuse Huawei of violating the export sanctions on Iran. The U.S. sanctions are in themselves a violation of UN resolutions.

All other companies violating the sanctions are simply fined, so it was really an unfair treatment to Huawei by "arresting the founder's daughter." This is undoubtedly self-evident: the United States is not to punish Iran, but purely to bring down Huawei. Such a reckless move has set a dangerous precedent in the modern economic history.

The adoption of double standards regarding U.S. companies violating Iran's ban and Chinese companies highlights that the U.S. is not following the rule of law, but the law of the jungle.

The act of the United States and Canada is undoubtedly a blasphemy against the "spirit of the rule of law" and the practice of hegemony in the name of the rule of law will seriously endanger the sanctity of the rule of law and undermine the belief of the global public in the rule of law.

In the long run, the U.S. move will seriously jeopardize the world's trust and respect for its leadership. If not respected, the U.S will face compromised effectiveness of its leadership, which will undoubtedly harm the outlook of the world. Trump may not be aware that he is depleting America's long-standing "credibility gold mine" for temporary gains.

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