Sunak weighs UK response to US curbs on hi-tech investments in China
Rishi Sunak is considering how to respond to a decision by the US president, Joe Biden, to prohibit some tech investments in China, as the government says it is continuing to assess national security risks.
Biden signed an executive order on Wednesday that authorises the US treasury secretary to prohibit or restrict US investments in Chinese entities in three sectors: semiconductors and microelectronics; quantum information technologies; and certain artificial intelligence systems.
The US government has said the measures are designed to address national security risks. China said on Thursday it was gravely concerned by the move.
The Financial Times reported that Sunak was considering following Biden’s lead and restricting outbound investment into China and was discussing the matter with businesses.
A spokesperson for Sunak’s government said the executive order gave 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 UK has recently sought to stabilise its relationship with Beijing after a period of turbulence caused by issues such as security rules in Hong Kong and alleged human rights abuses against Uyghur Muslims in Xinjiang.
The foreign secretary, James Cleverly, set out Britain’s new approach in April, saying it would seek to protect itself by limiting national security threats posed by China while engaging in areas such as trade, investment and the climate crisis.
Sunak and Biden signed an agreement to strengthen the historical security alliance between the UK and US in June, vowing to deepen economic ties in areas such as advanced technologies, clean energy and critical minerals.
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Official data shows that China is not a significant destination for British foreign investment, with the figure standing at £10.7bn ($13.6bn) at the end of 2021, compared with £461.4bn in the US. British investment in Hong Kong stood at £77.6bn.