Home Technology Ban on tech investments in China, UK could follow the US

Ban on tech investments in China, UK could follow the US

by Marcos

Rishi Sunak is reportedly considering following the line traced by Joe Biden, who a few hours ago signed an executive order to impose new restrictions on investments by American companies in China. The Financial Times reports that the prime minister of the United Kingdom reflects with his staff on whether or not to follow his American counterpart, imposing limits on the investments of British companies in China in various areas, including artificial intelligence, chips and quantum computing.

Financial evaluations would be underway, then the decision on the ban will be taken. During his visit to the White House, a couple of months ago the British prime minister pledged to “respond effectively” to the risk that economic and intellectual resources would end up increasing the threat posed by rival countries, both from a military and intelligence point of view. With his executive order, Biden has come out, he has given a clear signal, now he is waiting to see if the Atlantic partners will adopt the same approach. Sunak and the UK could be the first to align with the ban.

“This executive order on outbound investments from the country clearly expresses the American approach [to security risks]. The UK will carefully consider the new measures as it continues to assess the potential national security risks associated with certain investments.”

It will not be an easy decision for Sunak, in 2024 the general elections will be held across the Channel. The FT points out that ONS data indicate that in 2021 British investments in China stood at just over 10 billion pounds, or 0.6% of the global total, with a return of 1.2 billion pounds. Although China is the fourth largest trading partner of the United Kingdom, the British statistics institute (the equivalent of our Istat) in its July report highlighted that a significant portion of the total British investments abroad is not directed to Xi Jinping’s country.

This could make it easier for Sunak to choose to follow its American partner: the symbolic value could overshadow the economic repercussions.

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