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Poland's state security agency arrested a Chinese national and a Polish national on Friday over allegations of spying, Poland's state news agency PAP reported. Security services searched their homes and the offices of Huawei and Orange Polska, the Polish business of French mobile operator Orange SA.

Both men are said to have denied any wrongdoing, but many western countries are beginning to think again about using Huawei's telecoms equipment because of security concerns. The agency did not immediately respond to Reuters' requests for comment.

News of the executive's arrest comes amid speculation that Beijing is using Huawei to spy on USA companies as they build out the world's next generation of mobile-telecom networks.

An arrest of a Huawei executive in Poland for espionage might corroborate those concerns.

The arrests are the latest setback for the Chinese technology company which is embroiled in a dispute with the USA over a ban on their devices, as well as a diplomatic row with Canada over the arrest of their chief financial officer.

"Huawei is aware of the situation, and we are looking into it", a spokesman for the company told reporters.

A Huawei employee was arrested in Poland on Tuesday and charged with spying for China, according to numerous media reports.

"It's not the beginning of this case but it's also not the end", he said.

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Poland is Huawei's headquarters for Central and Eastern Europe and the Nordic region.

The pair are set to remain in custody for at least three months and apparently face up to ten years in prison.

The Huawei employee is a Chinese citizen responsible for sales to public-sector clients in Poland, according to TVPInfo.

New Zealand, Australia and the United States have barred Huawei from involvement in their next-generation 5G mobile networks.

"One thing is clear: this is another nail in the coffin of Huawei's European ambitions", said Thorsten Benner, director of the Global Public Policy Institute, a think tank. Extradition to the USA has already begun for a warrant alleging sanctions violations in trade with Iran.

"We are extremely grateful for his contributions to Huawei Canada during the past seven and a half years and I personally want to take this opportunity to thank him for the dedication and valuable support he has provided to me during the time we worked together".

A person with knowledge of the case confirmed that a Huawei employee called Wang Weijing - also known as Stanislaw Wang - had been arrested but not charged. "Huawei complies with all applicable laws and regulations in the countries where it operates, and we require every employee to abide by the laws and regulations in the countries where they are based".

Canada arrested Meng Wanzhou, the daughter of the company founder, as she transited through the country.