United Kingdom to formulate new legislation to counter influence of Chinese companies

London: The United Kingdom has indicated that if a foreign company forcibly acquired a British company creating a threat to national security, the foreign company will be prosecuted under criminal charges. A bill for this purpose will soon be presented in the British parliament and the British media informed that Prime Minister Boris Johnson has taken an adamant stand in the matter. This step is said to be taken to counter the increasing influence of the Chinese companies, in the British economy. Only a few days ago, the United Kingdom had proposed to form a new front, to dismantle the dominance of the Chinese companies, in the 5G sector.

Huge financial losses have been incurred by many companies in the global trade and industry sector, in view of the Coronavirus pandemic. Thousands of companies have collapsed financially and need huge investments to restart their operations. Taking advantage of the situation, China has started investing rapidly, in strategic companies, in various sectors. This investment is being made in Europe and Asia, along with the United States and the Chinese intension is to dominate the sectors by acquiring these companies. Various claims regarding this matter have appeared in the media.

To foil the Chinese plot, countries like the United States, Japan, Australia and India have initiated steps in that direction and these indications from the United Kingdom for a new legislation, also for a part of the initiative. British Daily ‘The Times’ has reported this and has said that Prime Minister Boris Johnson and his advisor Dominic Cummings are insistent on the bill. There will be a provision for action against a foreign company, if it is found to be acquiring a British company and there are indications of a possible threat to the national security from the deal. The Times reported that the action will be a punishment of criminal nature and sanctions.

It will be binding on all companies to inform the British government, in case a foreign company decides to buy more than 25% of a British company’s holding or assets or technology. At the same time, the foreign company will have to fulfil all the conditions put by the British government, after the acquisition. The British daily said that the bill has the provision that in case of failure to comply, the company directors shall face deportation, imprisonment of fines.

Although the bill is in the form of an action against foreign companies, it is clear that the Chinese companies are on target. The Johnson government, in the United Kingdom, has started an open political conflict against China over the issues of Coronavirus Pandemic, 5G and Hongkong. The decisions taken by the British government over the last few weeks, confirm this. These include an insistence on inquiry against China over the Coronavirus pandemic, indications to offer British citizenship to the people of Hongkong and proposal to open a front against the Chinese companies in the 5G sector.

While the British government is preparing for an action against the Chinese companies, a new campaign has been initiated, in the United Kingdom, by Huawei, the leading Chinese company in the telecommunications sector. This company has completed two decades in the United Kingdom and the company clarified that this campaign is in view of this achievement. In reality, this campaign is said to be an attempt to pressurise the Johnson government, on the 5G issue. In one of the narratives issued during the campaign, the Huawei company has mentions its network and the effects on various sectors in the UK, if the 5G contract does not go to Huawei. Therefore, the indications are that this issue will become a test of political relations, between the United Kingdom and China.