Shapps takes urgent action over ‘national security risk’ from China

G20: Rishi Sunak is questioned on China's stance on Ukraine

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Grant Shapps has taken urgent action after a “national security risk” from China was identified. The Business Minister ordered Chinese-owned technology company Nexperia to sell at least 86 percent of its shares in Britain’s biggest microchip factory, Newport Wafer Fab, following a national security assessment. Mr Shapps said: “We welcome foreign trade and investment that supports growth and jobs. But where we identify a risk to national security we will act decisively.”

The review of Nexperia’s 2021 purchase of Newport Wafer Fab, now known as Nexperia Newport Limited, was announced earlier this year after legislation came into force in January allowing the government to scrutinise and potentially block acquisitions and investments in sensitive sectors.

It can be applied retrospectively to deals completed since November 2020.

Nexperia is based in the Netherlands but is a subsidiary of China’s partially state-backed Wingtech.

The initial sale of the company was heavily scrutinised, with former business secretary Kwasi Kwarteng delaying its approval in July this year.

The controversial £63million deal was particularly sensitive as the UK firm has multiple contracts with the UK Government, including defence-related projects.

Speaking at the G20 summit in Bali this week, Prime Minister Rishi Sunak said China poses a “systemic challenge” to the UK, adding that it is “the biggest state-based threat to our economic security”

He told reporters: “My view on China is straightforward.

“I think that China unequivocally poses a systemic threat – well, a systemic challenge – to our values, and our interests, and is undoubtedly the biggest state-based threat to our economic security, let me put it that way. That’s how I think about China.

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“That’s what I said over the summer. That’s why it’s important that we take the powers that we need to defend ourselves against that.”

Mr Sunak said the National Security and Investment Act was a key part of the UK having the necessary powers to take action against China as a security risk.

But he warned that world leaders could not ignore China as a vital player.

He said: “I also think that China is an indisputable fact of the global economy and we’re not going to be able to resolve shared global challenges like climate change, or public health, or indeed actually dealing with Russia and Ukraine, without having a dialogue with them.”

The Prime Minister continued: “I think that view, by the way, is highly aligned with our allies.

“So if you look at the US national security strategy that was published just a couple of weeks ago, and if you look at how they describe their view of China and how to deal with it, I think you’ll find that it’s very similar to how I’ve just described it to you.

“The Canadians, the Australians, their versions of that strategy all say similar things. So what I’m saying to you, I think, is the shared view amongst our closest allies.”

During the summer’s leadership campaign, which saw Mr Sunak lose to Liz Truss, the now Prime Minister promised to shut down the 30 Chinese-funded Confucius Institutes in the UK, amid concerns they have sometimes been used as a front for the country’s ruling Communist party.

At the time, Mr Sunak told the Telegraph that China is the “biggest long-term threat” to the UK.

He added: “For too long, politicians in Britain and across the west have rolled out the red carpet and turned a blind eye to China’s nefarious activity and ambitions.”

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