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Meng Wanzhou, Huawei's global chief financial officer, is facing extradition to the United States and her arrest could rekindle tensions between Washington and Beijing only days after they agreed to a ceasefire in a bitter trade war.
Meng was arrested in Canada on Dec. 1. Her arrest is related to violations of U.S. sanctions, a person familiar with the matter said. Reuters was unable to determine the precise nature of the violations.
The Embassy of the People's Republic of China in Canada said that it resolutely opposes Meng's arrest and demands her immediate release.
"The Canadian police, at the request of the United States, arrested a Chinese citizen who had not violated any U.S. or Canadian law," the embassy said in a short statement on its website.
"China has already made solemn representations to the United States and Canada, demanding they immediately correct their wrong behaviour and restore Ms Meng Wanzhou's freedom."
A court hearing has been set for Friday, a Canadian Justice Department spokesman said.
Meng is one of the vice chairs on the Chinese technology company's board and the daughter of company founder Ren Zhengfei. Huawei is strategically important to China's ambitions in technology from 5G networks to chips.
Western governments are increasingly wary of what they say is possible Chinese state involvement in fifth-generation mobile and other communications networks. Huawei has insisted Beijing has no influence over the company.
Huawei's smaller rival ZTE Corp had to temporarily halt much of its business earlier this year after the U.S. imposed an export ban on the company related to it illegally shipping U.S.-origin goods to Iran and North Korea.