Illustration: Tang Tengfei/GT

While the UK government reportedly found no grounds to intervene the Newport Wafer Fab (NWF) takeover in a so-called national security review, British anti-China politicians have not given up their efforts to derail the deal, asking the UK government to follow the US' wrong approaches to block the deal. Yet, in fact, the last thing the UK should do is to follow the US' rigid political interference that risks endangering the global semiconductor industry.

In an article published in the UK newspaper the Telegraph on Monday, British Conservative Member of Parliament (MP) and former Party leader Iain Duncan Smith claimed that Chinese-owned semiconductor company Nexperia's takeover of NWF will "pose threat" to the UK's strategic interests. He called on the UK government to follow the lead of the US to take back control of the chip industry and other strategic industries from China.

The UK politician's comment came after US media reports said that Britain's national security adviser Stephen Lovegrove has concluded that the takeover can go ahead since no "security implications" have been found. But British anti-China politicians are apparently still trying all means to prevent the British government from approving the acquisition. "UK business secretary can, and still might, intervene," the BBC claimed.

The acquisition has encountered fierce backlash from anti-China politicians in the UK since it was reported last July. The so-called security review was carried out after a senior Tory MP, Tom Tugendhat, an anti-China hawk, publicly called for a review of the deal under the National Security and Investment Act. 

While British Prime Minister Boris Johnson at that time asked his national security adviser to review the deal, he said that he doesn't want an anti-China spirit to lead the UK to try to beat away every investment from China, because that would be economically foolhardy.

The irrationality represented by anti-China politicians like Tugendhat and Smith to follow the US' decoupling from China approach in the semiconductor sector will harm British companies' interests and cause a worse than expected impact on the UK's overall COVID-hit economy.

Although NWF is reportedly the largest microchip maker in the UK with 450 employees, it does not have strong competitive edge in global semiconductor manufacturing. In the face of the fiercer competition from Asian rivals, the company's choice to sell its business to former customer Nexperia is clearly in its own interests. 

After the suggested acquisition, the company is expected to win better development opportunity which is to be aided by the much stronger Chinese market demand.

If the acquisition plan fails to materialize because of the interference of British anti-China politicians, it will be difficult for the company to win the fierce competition and struggle to survive only by relying on its relatively weak technological updating capabilities and manufacturing capacity. 

Therefore, what is threatening the company now is the paranoid and short-sightedness of  the anti-China politicians in the UK.

And, if the domestic political environment in the UK continues to poison normal business atmosphere and the politicians compete on getting tougher toward China, while neglecting the country's own economic interests, then Johnson's earlier prediction will become true, and more Chinese investors will lose confidence in the UK's business environment, ultimately deciding to skip the country, which would have serious implications for the UK economy.

Smith was right at least on one thing. The UK government already has a poor record on treating Chinese investments. Its backtrack decisions on the Hinkley Point nuclear project and its banning Huawei's 5G equipment have seriously eroded Chinese companies' confidence in the country. It's hoped the UK government will not be hijacked by the anti-China politicians.


The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn