US President Joe Biden revealed an executive directive on Wednesday, introducing a ban on fresh investments in select technological domains within China, citing concerns over security.
This directive is scheduled for implementation in the upcoming year, and the United States will be observing closely to see if its nearest international partner will emulate the action.
Presently, the United Kingdom has communicated its intention to assess the steps taken by its transatlantic counterpart, as it persistently examines the security ramifications.
A spokesperson from the government articulated, “The elucidation provided by this executive directive pertaining to outward investments is of considerable significance in comprehending the US standpoint.”
This assertion was shared in a communication provided to the Financial Times earlier today. “The UK will thoroughly contemplate these innovative measures as we maintain an ongoing evaluation of potential security risks connected to specific investments.”
The impending prohibition encompasses novel investments in advanced microprocessors, quantum computing, and particular artificial intelligence systems, inclusive of private-equity ventures, venture capital endeavors, and joint collaborations.
Additionally, companies that are presently engaged in commerce within China will be obligated to notify the government regarding new investments in these sectors.
The underlying objective is to impede the Chinese military from accessing both US technology and financial resources.
It is evident that China responded unfavorably to the directive, characterizing the actions as “obvious economic coercion and technological intimidation.”
This predicament presents Rishi Sunak and his administration with a diplomatic quandary.
As stated in the agreement on cooperative export controls between the United States and the United Kingdom, inked in June, both parties consented to undertake an evaluation of export regulations, concentrating on entities that raise concerns.
Furthermore, Britain reaffirmed its commitment to enhance its control framework to more effectively address the transfer of sensitive technologies.
The United Kingdom has also asserted its readiness to remain closely aligned with the United States’ approach, particularly in matters of military technologies, and to respond efficiently to any potential consequences that British capital and technology might exert on mutual security interests.
It is worth noting that mainland China does not stand as a significant recipient of foreign investments from the United Kingdom, having attracted a sum of £10.7 billion (€12.4 billion) in 2021, in stark contrast to the substantial £461.4 billion (€537.5 billion) that flowed westward across the Atlantic.
Nevertheless, an update on the government’s foreign policy blueprint from May outlined the United Kingdom’s intention to safeguard critical supply chains, while underscoring the role of UK-China trade in bolstering the British economy.
Given the escalating convergence of technology, economics, and national security, it appears that a novel realm of high-stakes technological diplomacy is on the horizon.