Chinese companies have taken over or partly taken over 117 British companies in the last 10 years according to a leading think tank.
A database from the Henry Jackson Society (HJS) showed that companies linked to the Chinese state have taken over or partly taken over the UK companies in key sectors like defence, aviation, semiconductors, information, finance, and other firms that service the UK’s Critical National Infrastructure.
The HJS said in an emailed statement that over a third of the companies involved were in sectors the CCP (Chinese Communist Party) has cited as key to China’s state-led “Made in China 2025” industrial strategy, which aims to dominate global high-tech production.
The HJS database comes following a new bill announced by the government on Wednesday which will firm up the government’s investigatory and intervention powers around malicious corporate deals that might jeopardise Britain’s national security.
National Security and Investment Bill
The National Security and Investment Bill will compel companies to disclose any attempted “potentially hostile” direct foreign investment in 17 key corporate sectors including defence, artificial intelligence, robotics, energy, and computing.
Under the bill, non-compliant companies risk fines up to whichever is the greater of five percent of global turnover or £10 million ($13.1 million).
Prison terms of up to five years can also be imposed under the bill.
Urgent Review of Prior Acquisitions Needed
Business Secretary Alok Sharma said that the UK is “one of the most attractive investment destinations in the world and we want to keep it that way.
“But hostile actors should be in no doubt—there is no back door into the UK.”
“This bill will mean that we can continue to welcome job-creating investment to our shores, while shutting out those who could threaten the safety of the British people,” he said.
Alan Mendoza, executive director of HJS said in an emailed statement to The Epoch Times that with many British firms already sold to Chinese companies with ties to the Chinese state, the “government must make sure that it urgently reviews all of these prior acquisitions to ascertain the full extent of how compromised the UK might be by foreign corporate ownership.”
Commenting on the HJS database a government spokesperson said in an email to The Epoch Times that “We already have powers to intervene in mergers and acquisitions on national security grounds and recently lowered the threshold for intervention in three sensitive sectors of the economy.”
An earlier report (pdf) in October by the HJS highlighted similar concerns over China’s ” brain drain” of British intellectual property (IP) in the academic sphere to which the country is “belatedly waking up.”
The report gave data on the number of Chinese national students enrolled in high-risk subjects at British universities such as Oxford, Cambridge, and the University of London.
It highlighted that the UK doesn’t have a programme to directly prevent China from getting its hands on British IP via universities.
Instead, it has the compulsory but more broad Academic Technology Approval Scheme (ATAS) which replaced an underused voluntary scheme providing that only required universities refer students at their own discretion.
Under the ATAS scheme all research and some under-graduate international students except those from exempt countries who want to study “certain sensitive subjects” must apply for a special certificate before studying in the UK.
Sensitive subjects include physics, mechanical and aerospace engineering, chemical and energy engineering, and materials technology that would allow knowledge gained to be used in Advanced Conventional Military Technology (ACMT) or in weapons of mass destruction (WMDs) or their delivery systems.
Exempt countries whose students don’t need an ATS certificate before studying in the UK include EU countries, the European Economic Area, Australia, Canada, Japan, New Zealand, Singapore, South Korea, Switzerland, and the United States.
The HJS’s October report calls for the ATAS programme to be transferred from the Foreign Commonwealth and Development Office, which currently runs it, to the Home Office, and give responsibility for enforcing it to the National Crime Agency.
Updated with details about the HJS database and comments.