UK considers response to U.S ban on tech investments in China

[August 10, 2023]  LONDON (Reuters) - Britain said on Thursday it was weighing how to respond to a decision by U.S. President Joe Biden to prohibit some tech investments in China, adding it was continuing to assess potential national security risks.  

Biden signed an executive order on Wednesday that authorizes the U.S. Treasury secretary to prohibit or restrict U.S. investments in Chinese entities in three sectors: semiconductors and microelectronics, quantum information technologies and certain artificial intelligence systems.

A worker adjusts British and China (R) national flags on display for a signing ceremony at the seventh UK-China Economic and Financial Dialogue "Roundtable on Public-Private Partnerships" at Diaoyutai State Guesthouse in Beijing, China September 21, 2015. REUTERS/Andy Wong/File Photo

The U.S. government has said the measures are designed to address national security risks. China said on Thursday it was gravely concerned by the move.

A spokesperson for Prime Minister Rishi Sunak's government said the executive order gave important clarity on the U.S. approach: "The UK will consider these new measures closely as we continue to assess potential national security risks attached to some investments."

London has recently sought to stabilize its relationship with Beijing following a period of turbulence over issues such as security rules in Hong Kong and alleged human rights abuses against Uyghur Muslims in Xinjiang.

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 climate change.

Sunak and Biden signed a new agreement to strengthen the historical security alliance between their two countries in June, vowing to deepen economic ties in areas such as advanced technologies, clean energy and critical minerals.

Official data shows that China is not a significant destination for British foreign investment, with the figure standing at 10.7 billion pounds ($13.6 billion) at the end of 2021, compared with 461.4 billion pounds in the United States. British investment in Hong Kong stood at 77.6 billion pounds.

($1 = 0.7857 pounds)

(Reporting by Kate Holton; Editing by William Schomberg and Sharon Singleton)

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