Beijing detains Canadian as tensions soar over executive's arrest

A Canadian national was confirmed as being held in China on Tuesday, intensifying a diplomatic stand-off over the arrest of a top executive of Chinese telecom giant Huawei, as a judge in Vancouver considered her bail application.

Michael Korvig, a former diplomat who served in Beijing, was reported as having been detained as Meng Wanzhou was due in court for a bail hearing on US charges of violating Iran sanctions.

"We are aware of the situation of a Canadian detained in China," said Prime Minister Justin Trudeau, adding to concerns voiced by the International Crisis Group think tank, Korvig's employer, which first raised the alarm.

China has expressed outrage over Meng's arrest in Vancouver and warned of "grave consequences" if she was not immediately released, although Canada said no link between the two cases had been established.

Washington, which requested Meng's detention to have her extradited to US soil, called on Beijing to abide by its commitments to human rights.

"We urge China to end all forms of arbitrary detentions and to respect the protections and freedom of all individuals under China's international human rights and consular commitments," State Department Deputy Spokesman Robert Palladino told reporters.

The Huawei chief financial officer was arrested on December 1 on US fraud charges related to sanctions-breaking dealings with Iran.

A third day of court deliberations focussed on her proposed release plan, with a judge expected to come to a decision in the afternoon on whether to free her on bail.

Meng has agreed to surrender her passports and submit to electronic monitoring if she is released, pending the outcome of the extradition case.

"Given her unique profile as the face of a Chinese corporate national champion, if she were to flee or breach her order in any way in these very unique circumstances, it does not overstate to say she would embarrass China itself," Meng's lawyer David Martin told the court on Monday.

Meng also said in a 55-page affidavit that she had suffered numerous health problems, including surgery for thyroid cancer in 2011, and has been treated in a Vancouver hospital for hypertension since her arrest.

"I continue to feel unwell and I am worried about my health deteriorating while I am incarcerated," the affidavit read.

"I wish to remain in Vancouver to contest my extradition and I will contest the allegations at trial in the US if I am ultimately surrendered," she said.

Canadian Crown prosecutor John Gibb-Carsley has asked for bail to be denied, saying Meng faces serious criminal accusations of fraud and poses a flight risk.

Meng is accused of lying to bankers about the use of a covert subsidiary to sell to Iran in breach of sanctions. If convicted, she faces more than 30 years in prison.

The extradition process could take months, even years, if appeals are made in the case.

Meng's husband Liu Xiaozong has offered two Vancouver homes and 1 million Canadian dollars in cash -- for a total value of 15 million Canadian dollars -- as a surety for his wife's release.

But Gibb-Carsley took issue with Liu being appointed her custodian as he is not a legal resident of Canada, and flew in only last week on a tourist visa.

On Tuesday, four more custodians were proposed -- a local realtor, an insurance agent, a homemaker whose husband once worked for Huawei and her Vancouver neighbour.

Meng's detention has raised tensions following a truce in the US-China trade war, with Beijing summoning both the Canadian and US ambassadors over the weekend.

In a sign that the criminal case may not have derailed the detente, however, top Chinese and US negotiators spoke by telephone Tuesday to discuss the timetable of trade talks, the Chinese commerce ministry said.

It said in a statement that Vice Premier Liu He spoke with US Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer.

China's Foreign Minister Wang Yi warned in a speech in Beijing against the "bullying" of its citizens, however.

"We will fully safeguard the legitimate rights of Chinese citizens and return fairness and justice to the world," he said at the opening of a diplomatic symposium, without directly referring to the Huawei case.

There was no official word from China about Kovrig.