Meng Wanzhou, the daughter of Huawei's founder and a top executive, was arrested on December 1 and faces extradition to the United States.
The arrest of Wanzhou (46) threatens to drive a wedge between the US and China just days after they agreed a 90-day trade war truce in Argentina on Saturday - the day she was detained.
Meng's arrest, revealed late on Wednesday by Canadian authorities, is related to US sanctions, a person familiar with the matter said. Reuters was unable to determine the precise nature of the possible violations.
People familiar with the matter told Reuters in April that US authorities have been investigating Huawei, the world's largest telecoms equipment maker, since at least 2016 for allegedly shipping US-origin products to Iran and other countries in violation of US export and sanctions laws.
The arrest and any potential sanctions on the world's No 2 smartphone maker could have major repercussions on the global technology supply chain.
On Wednesday, China's embassy in Canada said it resolutely opposed the arrest and called for her immediate release.
Canadian Prime Minister Justin Trudeau on Thursday said his government had no involvement in Meng's arrest and had been given a few days' advance notice about the plan to arrest her at Vancouver airport. He declined to give further details, given that Meng faces a bail hearing on Friday.
US and Asian shares tumbled as news of the arrest heightened anxiety over prospects of a collision between the world's two largest economic powers, not just over tariffs but also over technological hegemony.
Huawei is not listed, but China's second-largest telecom equipment maker, ZTE Corp, sank nearly 6% in Hong Kong while most of the nearby national bourses lost at least 2%.
US stocks started lower on Thursday, with the Dow Jones Industrial Average down 1.16%. Investors rushed to the safety of government debt, pushing the yield on the US 10-year Treasury note back below 2.9% to its lowest level in three months.
Huawei is already under intense scrutiny from Washington and other western governments over its ties to the Chinese government, driven by concerns it could be used by Beijing for spying.
It has been locked out of the US and some other markets including Britain, Australia and New Zealand for telecom gear. Huawei has repeatedly insisted Beijing has no influence over it.
Huawei, which generated $US93 billion ($NZ135 billion) in revenue last year, confirmed the arrest. "The company has been provided very little information regarding the charges and is not aware of any wrongdoing by Ms. Meng," it said in a statement.
She was detained while transferring flights in Canada, it added.
Chinese foreign ministry spokesman Geng Shuang told a daily briefing on Thursday that China had asked Canada and the United States for an explanation of Meng's arrest, but they have “not provided any clarification".
The Chinese consulate in Vancouver has been providing her assistance, he added, declining further comment.
In April, the sources told Reuters the US Justice Department probe was being handled by the US attorney's office in Brooklyn.
The US Justice Department on Wednesday declined to comment. A spokesman for the US attorney's office in Brooklyn also declined to comment.
