China irked by blockade of microchip producer takeover

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The UK government said it considers the final order necessary and proportionate to mitigate the risk to national security…reports Asian Lite News

China has voiced displeasure over the Rishi Sunak government’s decision to reverse the acquisition of the UK’s largest microchip producer by a Chinese firm, citing national security concerns.

The UK government this week ordered China’s Wingtech Technology company to undo its acquisition of Britain’s biggest microchip factory, a year after the deal had been closed, according to media reports. The decision came even as the transaction in question had already been cleared by two previous security reviews.

Answering a question on the development, Chinese Foreign Ministry Spokesperson Mao Ning said the decision sends a clear signal that the UK is closed for business.

“The UK has overstretched the concept of national security and abused state power to directly interfere in a Chinese company’s normal investment cooperation in Britain,” Mao said during a press conference on November 18.

Mao said the UK government’s decision violates the lawful rights and interests of the company concerned, as well as the market economy principles and international trade rules.

“We firmly oppose the move and call on the UK to respect the legitimate rights and interests of Chinese companies and provide a fair, just and non-discriminatory business environment,” he added.

Earlier this week, the UK’s Business and Energy Department ordered Chinese-owned firm Wingtech Technology to divest its 86 per cent share in UK’s largest microchip manufacturer Newport Wafer Fab.

The UK government said it considers the final order necessary and proportionate to mitigate the risk to national security.

“The Secretary of State considers that a risk to national security relates to: technology and know-how that could result from a potential reintroduction of compound semiconductor activities at the Newport site and the potential for those activities to undermine UK capabilities,” the order read.

It added, “The location of the site could facilitate access to technological expertise and know-how in the South Wales Cluster (“the Cluster”), and the links between the site and the cluster may prevent the cluster being engaged in future projects relevant to national security.”

This report comes amid the growing decoupling of western countries from China, especially on the technological front.

More and more countries have expressed concern about the risk posed by the Chinese acquisition of advanced tech and theft of intellectual property in foreign countries.

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