All eyes on Beijing's response at a key anniversary event amid Huawei saga

BEIJING'S response to the arrest of Huawei's chief financial officer Meng Wanzhou in Canada last week was largely predictable. China's leaders saw the event as a political kidnapping by the US, with Canada acting as a willing lackey.

So in retaliation, Beijing has detained two Canadians, Michael Spavor, who describes himself as an entrepreneur, and a former diplomat, Michael Kovrig, who now works for a think tank, the International Crisis Group (ICG). Beijing says that ICG is not registered as a non-governmental organisation and therefore not allowed in the country.

To begin with, there is clearly an element of posturing in the Chinese response. While it is the duty of every nation to ensure that any citizen arrested in a foreign land is given consular assistance and informed of local laws and processes, it is both absurd and hypocritical for China to claim that Canada is in violation of human rights.

China should look at its own conduct. It has had no compunction in using the extra-territorial reach of its security services when it wants to get someone. In 2015, a Hong Kong publisher who mysteriously vanished from Thailand was not heard of for months until he surfaced in China. Nor should Beijing forget how it treated Peter Humphrey who spent 23 months in its prisons after he (and his wife) were detained in 2013 for conducting due diligence for GlaxoSmithKline and other foreign firms. On its part, the US has not covered itself with glory either. For US President Donald Trump to say that he would intervene in the US Justice Department's case against Ms Meng if it would serve national security interests or help achieve a trade deal with China indicates how little the rule of law matters.

Ms Meng will now be seen as a political pawn in trade negotiations. Worse, Mr Trump's remarks have made things awkward for Ottawa, which arrested her on Washington's behalf.

Whatever each side says about Ms Meng's arrest, there can be no doubt that this is just another chapter in the larger Sino-US trade war, never mind the 90-day truce. American businessmen can expect to suffer a similar fate, especially if US law enforcement agencies start targeting other Chinese individuals running companies that breach US unilateral sanctions.

What does this episode portend for trade relations between Washington and Beijing? It should be noted there was no joint statement after the US-China bilateral summit in Buenos Aires. The White House published a list of what it claimed were China's concessions, ranging from a promise to buy more American goods to agreeing to address the forced transfer of US technology to Chinese joint venture partners. On the other hand, Beijing only belatedly conceded that those issues were up for negotiation.

It has been suggested that while Chinese President Xi Jinping may be prepared to make serious concessions, he has to be careful not to be seen as weak and yielding. The Chinese Communist Party has stoked up nationalism with a narrative of China's new-found might in the world as an instrument to legitimise its hold on power. If Mr Xi is seen to be giving in, his own position, as well as his party's hold on power, will be weakened.

Today, Beijing is set to hold a ceremony to mark the 40th anniversary of the opening up of its economy. If market liberalisation is unveiled as a feature of China's own domestic economic self-help package, it could be evidence that Beijing has decided on a face-saving way to settle accounts with Washington. If, on the other hand, all talk is of standing up to Washington, expect a protracted trade war.