China to probe FedEx after Huawei says parcels diverted

BEIJING: China will investigate whether FedEx Corp damaged the legal rights and interests of its clients, the official Xinhua news agency said on Saturday, after Chinese telecoms giant Huawei said parcels intended for it were diverted.

Amid rising tensions between China and the United States, the Chinese commerce ministry said on Friday it would draft a list of "unreliable" foreign firms and individuals that harm the interests of Chinese companies. It gave no names.

Washington last month put Huawei on a blacklist that effectively blocks US firms from doing business with the Shenzhen-based company.

Huawei, the world's largest telecoms equipment maker, told Reuters on Friday it was reviewing its relationship with FedEx, which it alleged had diverted two parcels destined for Huawei addresses in Asia to the United States and had attempted to reroute two others.

FedEx said the packages were "misrouted in error."

Xinhua, without elaborating, said FedEx recently did not deliver to the right addressees and addresses in China.

FedEx said in a statement it values its relationships with customers in China, and that it would "fully cooperate with any regulatory investigation into how we serve our customers."

On Tuesday, FedEx China apologised on its Chinese social media account for the "mishandling" of Huawei packages and confirmed there was no "external pressure" to divert packages.

The US government says Huawei is a potential espionage threat because of its close ties with the Chinese government.

Huawei has repeatedly denied it is controlled by the Chinese government, military or intelligence services.

The issue has become a flashpoint in the escalating trade war between the world's two biggest economies.

Last month, Washington slapped additional tariffs of up to 25% on $200 billion of Chinese goods, accusing Beijing of reneging on its previous promises to make structural changes to its economic practices.

That prompted Beijing to hit back with additional levies on the majority of US imports on a $60 billion target list.

The Chinese tariffs took effect on Saturday.