By Jessica Frank-Keyes
China is the biggest “state-based threat” to the UK’s economic security, deputy prime minister Oliver Dowden has said.
Cabinet Office figures have revealed the government intervened in eight attempts by Chinese buyers to takeover UK firms due to national security fears in the last year.
Dowden told the BBC Chinese deals posed risks due to the Asian power being a significant global investor, and representing the “largest state-based threat to economic security”.
More Chinese deals received ministerial interventions than those of any other nations – but firms in the UK and US also saw government stepping in over national security.
The Cabinet Office report said there were 886 alerts about possible issues with investments in areas such as defence, energy, advanced materials and communications.
A total of 65 underwent further investigation, with 42 per cent relating to China, 32 per cent to the UK and 20 per cent to the US.
While ‘final orders” either preventing, reversing or imposing conditions on deals were issued in 15 cases: eight Chinese, four UK and three US.
National security risks
This is down to the National Security and Investment Act 2021 granting the government powers to stop or dictate restrictions on investments thought to be national security risks.
Speaking to the broadcaster, Dowden said: “I’m very clear I do not want us to decouple from China, I don’t think it’s in our interest. But at the same time, we have to be clear-eyed about protecting our national security, just in thesame way that the Chinese are.“
“It’s not a surprise we should look carefully at Chinese transactions. But equally, we look across the board.”
Regulators across the globe have zeroed in onChinese companies in recent times, over concerns the state might utilise them for espionage activities, such as telecoms firm Huawei.
The conglomerate was barred from 5G mobile networks in Britain in 2020 with other nations following suit, while governments including in the US, UK and EU have made moves to block the Chinese-owned video sharing app TikTok from official devices over data privacy fears.
Dowden added: “We cannot find ourselves in a situation where we totally decouple from an economy like China’s, it’s not in our national interest in terms of jobs and prosperity.
“What we have to do is de-risk that engagement. And that is precisely what this kind of legislation enables us to do.”
China’s embassy in London has been approached for comment.
