The United States government is questioning British companies about their connections to Chinese investments.

The United States government has been discussing with British businesses regarding their connections to China while the United Kingdom contemplates prohibiting its companies from investing in certain sectors of the Chinese economy.

Business and Trade Minister Nus Ghani told POLITICO that the U.K. government was waiting on the results of the U.S. survey to make a decision on whether to follow America’s lead and clamp down on British investment into China.

Following the signing of the joint Atlantic Declaration in July, Rishi Sunak and Joe Biden have committed to collaborating on addressing national security concerns related to specific forms of foreign investment.

The White House has implemented restrictions on American companies attempting to invest in Chinese businesses that are working on developing cutting-edge technologies such as advanced semiconductors, quantum computing sensors, and certain types of artificial intelligence.

During the presidency of Donald Trump, the United States initiated limitations on collaborating with China in emerging technologies. President Biden has further intensified this effort.

According to Sam Hogg, founder of the weekly briefing “Beijing to Britain,” the Sunak government has aligned itself with the U.S. government in many aspects, but is not simply mimicking their actions.

Hogg emphasized the significance of the U.K. taking note of the actions of the U.S. and analyzing the information provided by the U.S. In doing so, the U.K. can make an independent decision that aligns with our security objectives.

Earlier this year, POLITICO reported that the U.K. had been conducting surveys on British companies regarding this matter and was contemplating implementing similar restrictions on British investments in China.

During an interview with POLITICO, Ghani did not dismiss the possibility of limiting external investments.

She stated that during the summer, the U.S. is making efforts to connect and seek advice from businesses in the U.K.

“I am interested in reviewing the feedback gathered from the consultation. I will be meeting with the American minister in charge to discuss the responses from businesses in the U.K.”

The current administration led by Sunak is attempting to revitalize the economic relationship with China, with the condition that any foreign investment must not pose a risk to national security.

During a recent visit to Beijing, Foreign Secretary James Cleverly expressed that the U.K. is welcoming Chinese investors and is open for business.

Restricting British companies from investing in the Chinese technology industry could potentially lead to retaliation. The Chinese ambassador to the US commented on America’s own investment restrictions, stating that Beijing will not back down from provocations and will definitely respond.

As of now, China has not responded with any retaliatory actions.

According to Sophia Gaston, the director of foreign policy at the center-right organization Policy Exchange, it would be wise for the U.K. to begin considering their investments in China.

“We will not necessarily align perfectly with all of the areas the U.S. has identified for its own restrictions,” she said. 

However, we must take into account the potential impacts on global politics if British companies choose to invest in industries that will be crucial for gaining a competitive edge and adaptability in the next ten years.