FedEx accused of breaking Chinese law with Huawei deliveries

An investigation by the Chinese government into FedEx showed the US parcel delivery service broke the law by not delivering packages to the country’s leading telecoms equipment maker Huawei, state media alleged on Friday.

A report by state-backed Xinhua news agency also alleged that the probe had uncovered other violations of Chinese law by FedEx but did not provide details, in findings that come against the background of trade tensions between Beijing and Washington.

FedEx could not be immediately reached for comment.

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 earlier this year.

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.

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.

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

The logistics company has said the failure to deliver parcels was due to an operational error, but Xinhua said the investigation had found that this “was not in line with the facts”.

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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.

The retaliation against FedEx comes as China widens its retaliation against measures brought by the US and other countries against Huawei and its employees.

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.

Additional reporting by Xinning Liu in Beijing



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