China blocked from multiple takeovers under new National Security Law

Deputy Prime Minister Oliver Dowden argues that China is «the nation's biggest economic security threat.» Credit: JESSICA TAYLOR/AFP

More than half of the deals challenged under the new UK national security laws involved Chinese buyers, according to the government.

The UK intervened 15 times to block, cancel or impose conditions on a Homeland Security and Investment takeover last year. The law came into force in January 2022.

Chinese buyers have been implicated in eight cases, many of which involved secret technology.

Deputy Prime Minister Oliver Dowden told the BBC Xi: “China is the biggest national threat to economic security. Therefore, it is not surprising that we should keep a close eye on Chinese transactions. But we are equally looking in all directions.”

The most notorious intervention came in the case of the acquisition of Newport Wafer Fab by Chinese chip maker Nexperia.

Grant Shapps, then business secretary, issued a final order last year forcing Nexperia to withdraw from its £63m takeover of the Welsh factory. originally announced in 2021.

China-backed chipmaker Nexperia was forced to back out of its £63m takeover of Newport Wafer Fab last year. Photo: Matthew Horwood/Getty Images p>In all, 866 notices of potential rule violations were received by the Cabinet Office and 65 acquisitions were submitted for review. During the year until the end of March, 15 final orders were issued to protect national security.

New national security rules were introduced last year to ensure that businesses handling sensitive products are not sold without prior investigation.

Sectors covered by the rules include defense, satellite and space technology, robotics and nuclear energy. .

The first deal with China blocked by legislation was an attempt by Beijing-based Infinite Vision Technology to buy imaging technology from the University of Manchester.

Other interventions include the halt of Pulsic, a supplier of semiconductor design tools, was sold to Chinese investor Super Orange HK Holding last summer. year.

In addition to the eight deals involving Chinese buyers that were challenged, four other deals involving British buyers were prosecuted, as well as three deals involving a US buyer.

Dowden said: «Security and prosperity go hand in hand in today's world, and this report shows that we are using our investment verification capabilities quickly, transparently and predictably.»