UK government warns tech companies of business in China
The UK government has launched a website this week warning tech companies of the complications that can arise from expanding into China and accepting Chinese investment.
The government said that the website was developed in response to demand from the tech sector. It is intended as a guide for digital and tech companies to support good practices and raise awareness of potential risks associated with doing business in China and with Chinese companies.
The website has the slogan 'China. See the Potential. Know the Challenge'.
“The UK is determined to support our businesses to engage with China in a way that reflects the UK’s values and takes account of national security concerns,” said digital and culture minister Caroline Dinenage, in a statement.
The website includes case studies, guides to conducting due diligence, and links to specialist consultancies. It also includes explicit warnings about the possibility that ethical, security, and commercial norms could be violated, and advises taking steps to prepare for these possibilities.
“There is a risk that your company’s technology could be used to violate human rights, posing a significant risk to your business’s reputation,” the website states in a section which highlights reports of heavy internet censorship and mass surveillance of ethnic minorities.
Another section warns companies to take “legal steps to protect your IP in China” and to “consider your cyber security”.
The launch of the website could stoke existing tensions between the UK and Chinese governments, which have in part concerned disputes over the treatment of tech companies.
This summer, the UK government overturned its previous decision to allow Shenzhen-based Huawei a limited role in supplying equipment for the UK’s 5G rollout, ordering operators to rip all Huawei equipment out of their 5G networks by 2027. This week, the government presented a bill to parliament which proposes fining companies up to 10 per cent of turnover or £100,000 per day for failing to remove Huawei equipment from their networks.
The UK government cited national security concerns aggravated by new US sanctions against the company; claims which Huawei has strenuously denied.
This month, the UK government put forwards its National Security and Investment Bill, which would give the government greater powers to intervene in commercial transactions which could undermine national security, including blocking transactions as a last resort. This could affect the sale of assets – such as land, property, and infrastructure – as well as IP.
In April, the digital and culture secretary Oliver Dowden intervened to delay an emergency board meeting of Imagination Technologies, following allegations that state-owned China Reform Holdings has been attempting to seize control through the appointment of sympathetic board members.
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