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UPDATE 3-China formally arrests two Canadians on state secrets charges

Michael Martina

(Recasts, adds Canadian government response)

BEIJING, May 16 (Reuters) - Chinese authorities have formally arrested on state secrets charges two Canadians detained last year, the government said on Thursday, drawing condemnation from Canada in a case that is likely to further increase tension between Ottawa and Beijing.

Businessman Michael Spavor, who worked with North Korea, and former diplomat Michael Kovrig were picked up separately in December, shortly after Canada arrested Huawei Technologies Co Ltd Chief Financial Officer Meng Wanzhou, who faces extradition to the United States.

China has repeatedly demanded Meng be released, and has reacted angrily to extradition proceedings against her in a Canadian court.

"According to Chinese prosecutors' approval, Michael Kovrig, due to being suspected of crimes of gathering state secrets and intelligence for foreign (forces), and Michael Spavor, for being suspected of crimes of stealing and illegally providing state secrets for foreign (forces), have in recent days been approved for arrest according to law," foreign ministry spokesman Lu Kang told a daily news briefing.

The measures were in accordance with the law, Lu said, and Beijing hoped Canada "will not make irresponsible remarks" about law enforcement and judicial proceedings in China.

Canada's government denounced the move.

"Canada strongly condemns their arbitrary arrest as we condemned their arbitrary detention on Dec. 10. We reiterate our demand that China immediately release Mr. Kovrig and Mr. Spavor," Canada's foreign ministry said.

Canadian diplomats have made recent consular visits to them both, it added, declining to provide further details for privacy reasons.

"Canada continues to express its appreciation to those who have spoken in support of these detained Canadians and the rule of law. This includes Australia, the EU, France, Germany, the United Kingdom, the United States, the Netherlands, Latvia, Lithuania, Estonia, Spain, Denmark, NATO, and the G7."

In March, China accused the two of involvement in stealing state secrets.

China has said it is fully guaranteeing both men's lawful rights. Kovrig also holds Hungarian citizenship.

Kovrig works for the International Crisis Group (ICG) non-governmental organisation which focuses on conflict resolution.

With their formal arrest, they could soon face trial, though it is unclear when that may be.

While Canada says China has made no specific link between the detentions of the two men and Meng's arrest, experts and former diplomats say they have no doubt it is using their cases to pressure Canada.

Meng, 47, is the daughter of Huawei Technologies Co Ltd's billionaire founder, Ren Zhengfei.

She was arrested at Vancouver's airport in December on a U.S. warrant and is fighting extradition on charges that she conspired to defraud global banks about Huawei's relationship with a company operating in Iran.

Meng was released from jail in December on C$10 million ($7.5 million) bail and must wear an electronic ankle bracelet and pay for security guards. She has been living in a Vancouver home that was valued at C$5 million in 2018.

Both she and the company have denied the U.S. charges. (Reporting by Michael Martina; Additional reporting by David Ljunggren in Ottawa; Writing by Ben Blanchard; Editing by Darren Schuettler, Robert Birsel)