London ordered a Chinese firm to reverse its acquisition of the UK’s largest microchip maker
China has accused the UK government of breaching international trade rules after the UK intervened to reverse the sale of the country’s biggest microchip maker to a Chinese company on the grounds of “national security.” The order comes more than a year after the closing of the transaction.
Asked about London’s decision to ban the deal at a press conference on Friday, Chinese Foreign Ministry spokeswoman Mao Ning condemned the move, insisting Britain should “respect the legitimate rights and interests of Chinese companies” and provide a “fair, just and non-discriminatory business environment.”
“The UK has overstepped the concept of national security and abused state power to directly interfere in the normal investment cooperation of a Chinese company in Britain,” he said. added. Mao told reporters. “This violates the legitimate rights and interests of the business concerned, as well as the principles of the market economy and the rules of international trade of which the United Kingdom has long claimed to be a champion.”
Earlier this week, the UK Department for Business, Energy and Industrial Strategy ordered Wingtech Technology – a Chinese technology company – to divest its 86% stake in Newport Wafer Fab, Britain’s largest microchip maker based in Newport, Wales. Wingtech’s takeover deal was completed in July 2021 and carried a price tag of $75 million.
The order to retroactively cancel the sale was “necessary and proportionate to mitigate the risk to national security”, the department said, saying the deal could give the Chinese company “technology and know-how” who could “undermining the capabilities of the UK.”
In a statement issued through its Dutch subsidiary, Nexperia Holding, Wingtech said it was “shocked” by the move, the operation in question having already been “cleared by two previous security reviews”, and swore to contest the order.
“The decision is wrong and we will appeal to overturn this assignment order to protect the more than 500 jobs in Newport. This decision sends a clear signal that the UK is closed for business,” said the company’s UK director, Toni Versluijs.
London’s move was cleared under its new National Security and Investment Act, a law that came into force in January, and marks the second time the UK government has stepped in to block a deal with a Chinese company. In August, trade officials also preemptively rejected the sale of a British technology company to Super Orange HK Holding Ltd, a Hong Kong-based company, saying software produced by the British company “could be used to build defense or technological capabilities.”
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