UK considers response to US ban on tech investments in China

UK considers response to US ban on tech investments in China

US Tech Investment Prohibition in China: How Britain is Responding

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LONDON, Aug 10 (ANBLE) – In response to US President Joe Biden’s decision to prohibit tech investments in China, Britain is currently considering its own course of action. The UK government intends to evaluate potential national security risks while deliberating on how to react to the executive order signed by Biden on Wednesday. The order grants the US Treasury secretary the authority to restrict or prohibit American investments in Chinese entities involved in three sectors: semiconductors and microelectronics, quantum information technologies, and certain artificial intelligence systems.

The US government’s motivation behind these measures is to address national security risks. In response, China expressed great concern. A spokesperson for UK Prime Minister Rishi Sunak’s government welcomed the executive order, stating that it provided important clarity on the US approach. The UK will thoroughly assess these new measures as they continue to evaluate potential national security risks associated with specific investments.

It is worth noting that London has been working towards stabilizing its relationship with Beijing after a period of turbulence, marked by issues such as security rules in Hong Kong and alleged human rights abuses against Uyghur Muslims in Xinjiang. In April, the UK’s Foreign Secretary James Cleverly outlined a new approach that aimed to protect the country from national security threats posed by China while simultaneously engaging in areas such as trade, investment, and climate change.

In June, Prime Minister Sunak and President Biden signed a new agreement to strengthen the historical security alliance between the two nations. This agreement reaffirmed their commitment to deepen economic ties, particularly in advanced technologies, clean energy, and critical minerals.

When looking at official data, China does not emerge as a significant destination for British foreign investment. As of the end of 2021, British investment in China amounted to £10.7 billion, in stark contrast to the £461.4 billion invested in the United States. British investment in Hong Kong stood at £77.6 billion.

This discrepancy in investment figures suggests that the UK does not heavily rely on Chinese entities in the specified sectors. Consequently, the impact of the US executive order may be relatively minimal on British investments and the bilateral relationship between the UK and China. Nonetheless, the UK remains committed to considering the potential national security risks in its decision-making process.

In conclusion, the UK is carefully evaluating its response to the US executive order on tech investments in China. While the impact may be minimal on British investments, both countries are focused on addressing national security risks and developing areas of economic cooperation. The UK’s approach seeks to strike a balance between protecting its national security interests and engaging with China in various sectors. As the situation unfolds, it will be interesting to see how the UK further navigates its evolving relationship with China in a changing geopolitical landscape.

($1 = £0.7857)