[HONG KONG] China formally arrested two Canadians detained for months, a Canadian newspaper reported, in cases that have strained tensions between the two countries.

Former diplomat Michael Kovrig and entrepreneur Michael Spavor have been moved from residential surveillance at an unknown location to an official detention centre, the Globe & Mail said on Thursday, citing a government source who was granted anonymity because they weren't allowed to speak about the issue. Neither man has been formally charged with a crime, the paper said, without saying exactly when the arrest took place.

A news portal run by China's Central Political and Legal Affairs Commission previously accused Mr Kovrig - on leave from Canada's foreign service - of spying and stealing state secrets while employed by the International Crisis Group, and said Mr Spavor was his primary contact and supplied him with intelligence.

The men were detained separately in December in a move seen by some in the West as retaliation for the arrest of Huawei Technologies Co chief financial officer Meng Wanzhou in Vancouver at the request of the US. They have since languished in China's opaque legal system, allowed sporadic visits by Canadian authorities but denied access to lawyers.

The arrests come amid escalating tensions between China and the US over Huawei. President Donald Trump this week moved to restrict Huawei's ability to do business with US companies.

BLOOMBERG