This deal must have been under negotiation between all 3 countries for some time. In litigation, you don’t negotiate if you have a sure chance of winning the case. Winners don’t negotiate.
If that’s the case then China should have sensed that the extradition might fail when approached by the US. It could have then let it play out, win the case and have a huge PR victory.
None of that happened, which means China had little Intel on what was going to happen. And all sides decided to negotiate and settle the matter in a mutually beneficial manner
The innocent negotiate all the time in western courts because in western courts, it’s plain pay to win.
Trump’s private business is built largely on that principle, where he would drag things out for so long in court that he wins by default when the other party runs out of money and cannot continue.
The US government takes that to a whole new level where it’s basically legalised extortion now. They go after big foreign companies with trumped up charges all the time and their victims settle because to fight the charges would be more damaging in terms of legal costs and reputational damage.
In this case the Canadians would have dragged things out for as long as the Americans wanted and it could literally be decades before it was all settled in western courts.
But the deal cut was basically as overwhelming a win as China could have hoped for, where the Americans essentially admitted they had fuck all evidence and got nothing in return.
I would not be surprised if this whole saga has made Chinese nationals essentially bulletproof to American extradition requests. Because you have to be a idiot to process such requests now after seeing how much damage Canada took for American political games which ultimately amounted to nothing.