UK says it wants to work with China. Really?

The UK government on Wednesday ordered a Chinese-owned company to divest most of its stake in the United Kingdom’s biggest semiconductor maker. This is not only a heavy blow to a legally operating Chinese company, but also a fresh reminder of the harsh wintry global climate for Chinese companies’ overseas operations.

The order has the effect of requiring Nexperia BV to sell at least 86 percent of its stake in Nexperia Newport Limited, formerly Newport Wafer Fab, within a specified period and by following a specified process, the UK Department for Business, Energy and Industrial Strategy said in a statement.

The Netherlands-based Nexperia, which is owned by Chinese smartphone maker Wingtech, acquired an additional 86 percent of the share capital of Newport Wafer Fab on July 5 last year, taking its shareholding to 100 percent, which constituted a trigger event under the UK’s National Security and Investment Act, which came into force on Wednesday.

The divestment order, which Nexperia has vowed to appeal, was allegedly based on what British Business Secretary Grant Shapps called a “detailed national security assessment”. That assessment, like the UK’s 2020 ban on Chinese telecommunications company Huawei’s involvement in the country’s 5G broadband network, concluded that activities at the site had the potential “to undermine UK capabilities” and prevent UK technological expertise and know-how with links to the site being engaged in future projects relevant to national security.

As in many other similar cases targeting technology-related Chinese investments in Western countries, the “national security” argument was based almost entirely on an assumption of guilt. Of course this is not fair to any company that is operating in strict accordance with law. But what is happening to Chinese overseas investment lately in Western countries has clearly deviated far from the set rules and norms of normally functioning market economies.

The divestment order for Nexperia is only one more footnote to the changing global geopolitical climate that appears to be increasingly unwelcoming of Chinese investment, particularly in technology companies. Nexperia is only the latest victim of the United States-led Western initiative to frustrate, if not throttle, Chinese pursuit of technological advancement, and it won’t be the last. The US Commerce Department is reportedly set to put more Chinese technology companies on its Entity List. US allies are following its lead with stricter “national security” scrutiny of Chinese investments and acquisitions.

As is true in the Nexperia case, where a Chineseowned company based in the Netherlands had increased its stakes in a UK company, most of today’s cutting-edge technologies and their application are the fruits of global expertise and cooperation, and depend on them. The Western countries’ initiative to slam their doors shut to Chinese companies will inevitably hurt themselves as it will serve to restrict their access to China’s massive market, which has proven to be instrumental to the popularization and rapid progress of many applied technologies.

Hyping up disinformation about a security threat and then using it to hobble Chinese companies has become a go-to tool of the US, as a Chinese Foreign Ministry spokeswoman said. The UK should act responsibly and not just be a poodle yapping for attention at the heels of Washington.