UK could be set to block investment in China's high-tech sector
UK could be set to block investment in China’s high-tech sector as Rishi Sunak looks at tightening the rules following US ban
- PM Rishi Sunak is now looking at restricting British investment in China
Britain could follow the US by tightening rules on investment in China’s high-tech sector.
President Joe Biden signed an executive order earlier this week authorising the US treasury secretary to ban or restrict American investments in Chinese companies.
The order covers those firms specialising in semiconductors and microelectronics, quantum information technologies and certain AI systems.
Rishi Sunak is now looking at restricting British investment in China and is discussing the matter with businesses, his spokesman said.
A UK government spokesman said last night: ‘The Prime Minister and President Biden have rightly put our economic security at the forefront of UK-US co-operation, as seen at the signing of the Atlantic Declaration.
President Joe Biden (pictured) signed an executive order earlier this week authorising the US treasury secretary to ban or restrict American investments in Chinese companies
‘This executive order on outward investment gives important clarity on the US approach. The UK will consider these new measures closely as we continue to assess potential national security risks attached to some investments.’
The announcement could further inflame tensions between London and Beijing.
China’s ministry of commerce said yesterday that it had ‘serious concerns’ about the order and ‘reserves the right to take measures’.
In a letter to Congress, Mr Biden said he was declaring a national emergency to deal with the threat of advancement by certain adversaries like China ‘in sensitive technologies and products critical to the military, intelligence, surveillance or cyber-enabled capabilities’.
US Senate Democratic leader Chuck Schumer said: ‘For too long, American money has helped to fuel the Chinese military’s rise. The US is taking a strategic first step to ensure American investment does not go to fund Chinese military advancement.’
MPs from all parties have accused the UK Government of being too soft on China.
Rishi Sunak (pictured) is now looking at restricting British investment in China and is discussing the matter with businesses, his spokesman said
READ MORE: Ministers intervened in EIGHT takeovers by Chinese firms last year as deputy PM warns Beijing is the ‘largest state-based threat’ to security
Foreign Secretary James Cleverly has sought a policy of ‘robust engagement’, which critics suggest has only served to allow China free rein. China is the UK’s fourth largest trading partner, according to the latest figures, with £10.7 billion invested in 2021.
Last month it emerged that ministers used national security powers to intervene in eight transactions involving Chinese-linked investment in British companies in the year to March 31. Some 866 deals were referred to the Government under the National Security and Investment Act, Cabinet Office data showed. Most were cleared but 15 were the subject of a final order under which the Government intervenes.
More than half of firms are taking a ‘wait-and-see approach’ to making new investments in China, a report from the British Chambers of Commerce in China found.
The European Commission has also said that it will closely scrutinise the US decision. In recent years, semiconductor technology has become the battleground of tensions between China and the West.
Last year, the Government blocked the acquisition of microchip company Newport Wafer Fab in Wales by Nexperia, a Dutch subsidiary of the partially state-owned Chinese firm Wingtech, after a lengthy review.
Tech company leaders have warned that the UK’s semiconductor strategy is ‘disappointing’ when compared to that of other nations.
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