Rishi Sunak weighs following Joe Biden on curbing tech investment in China
Rishi Sunak weighs following Joe Biden on curbing tech investment ... Financial Times
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Rishi Sunak Weighs Restricting Outbound Investment into Chinese Tech Sector
Rishi Sunak is considering whether to follow US President Joe Biden in restricting outbound investment into the Chinese tech sector, including artificial intelligence, chips, and quantum computing.
Consulting Business and Financial Sector
Biden announced the new security regime on Wednesday, but the UK Prime Minister has been more circumspect. The UK government is consulting business and the financial sector before deciding whether to follow suit.
Sunak promised Biden during a visit to the White House in June that Britain would “respond effectively” to the risk that British capital and expertise could help rival countries develop a military or intelligence threat.
In the same month, both leaders agreed on an “Atlantic Declaration” putting economic security at the heart of their new partnership.
US Executive Order
On Wednesday, the White House announced an executive order that placed targeted restrictions on US investment into the Chinese tech sector, with plans for them to come into force next year. The US is waiting to see if the UK and other allies will back this new approach.
The British government stated, “This executive order on outward investment gives important clarity on the US approach. The UK will consider these new measures closely as we continue to assess potential national security risks attached to some investments.”
Sunak’s Approach to China
Sunak’s general approach to China is rooted in a hard-headed desire to do business with the Asian superpower wherever possible, except when national security issues are at stake.
In April, UK Foreign Secretary James Cleverly called for a “robust and constructive” new bilateral relationship with Beijing.
In May, Sunak sent Britain’s investment minister, Lord Dominic Johnson, to Hong Kong, marking the first senior British official to visit the former UK colony in five years and the first since China imposed a national security law.
UK’s Response and General Election
The Atlantic Declaration stated that the UK would “swiftly” engage with businesses and the financial services sector to assess and inform how the UK can best respond effectively to these risks and meet their shared objective. However, the declaration acknowledged that the US and UK might move at different speeds, referring to their “own respective timelines.” With a UK general election approaching next year, time is short for Sunak to act.
The UK government also announced plans to update its export control regime to tackle sensitive technology transfers while remaining an open and outward-looking economy.
UK-China Trade and Investment Figures
China is the UK’s fourth-largest trading partner but a much less significant destination for UK foreign investment. According to figures released by the UK’s Office for National Statistics (ONS) in July:
- The stock of foreign direct investment from the UK into China stood at £10.7bn, or 0.6% of the global total, in 2021.
- Financial services accounted for almost a quarter of the total, more than any other sector.
- The China investments accounted for earnings of £1.2bn in 2021.
- Hong Kong, closely aligned with Beijing, recorded a stock of £77.6bn of UK investment.
- Mainland China ranked outside the top 20 jurisdictions based on total UK investment, ranking below countries like India, Australia, Switzerland, and several EU countries.
A report published in May by the British Chamber of Commerce in China revealed that more than half of British companies surveyed were taking a “wait-and-see approach” to making new investments in China.
SDGs, Targets, and Indicators
1. Which SDGs are addressed or connected to the issues highlighted in the article?
- SDG 8: Decent Work and Economic Growth
- SDG 9: Industry, Innovation, and Infrastructure
- SDG 16: Peace, Justice, and Strong Institutions
2. What specific targets under those SDGs can be identified based on the article’s content?
- SDG 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 percent gross domestic product growth per annum in the least developed countries
- SDG 9.5: Enhance scientific research, upgrade the technological capabilities of industrial sectors in all countries, in particular developing countries, including, by 2030, encouraging innovation and substantially increasing the number of research and development workers per 1 million people and public and private research and development spending
- SDG 16.5: Substantially reduce corruption and bribery in all their forms
3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?
- Gross domestic product (GDP) growth rate
- Number of research and development workers per 1 million people
- Level of corruption and bribery
4. Table: SDGs, Targets, and Indicators
| SDGs | Targets | Indicators |
|---|---|---|
| SDG 8: Decent Work and Economic Growth | SDG 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 percent gross domestic product growth per annum in the least developed countries | Gross domestic product (GDP) growth rate |
| SDG 9: Industry, Innovation, and Infrastructure | SDG 9.5: Enhance scientific research, upgrade the technological capabilities of industrial sectors in all countries, in particular developing countries, including, by 2030, encouraging innovation and substantially increasing the number of research and development workers per 1 million people and public and private research and development spending | Number of research and development workers per 1 million people |
| SDG 16: Peace, Justice, and Strong Institutions | SDG 16.5: Substantially reduce corruption and bribery in all their forms | Level of corruption and bribery |
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Source: ft.com
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