Britain will take measures to protect the defense industry from foreign influence
The British government is determined to protect the country's defense industry from Chinese investors. The draft law prepared for this purpose largely repeats the measures already taken in other Western States. European countries and their allies fear that China will use the economic crisis caused by the pandemic to influence the geopolitical situation.
The draft law "on national security and investment" submitted by the British government also applies to the defense industry. The UK authorities expect that it can investigate and influence mergers, acquisitions and other types of transactions that potentially pose a threat to the national security of the state.
The bill covers artificial intelligence, robotics, military or dual-use technologies, satellite and space technologies, as well as critical defense and other critical suppliers.
"Under the national security and investment bill, the British government will take a targeted, proportionate approach to ensure that it can scrutinize, impose conditions or, as a last resort, block a deal in any sector where there is an unacceptable risk to national security," the British Ministry of business, energy and industrial strategy said in a statement.
The acquisition of sensitive British assets and intellectual property, as well as the acquisition of companies, is now regulated by UK law.
The government said the move takes British law into the 21st century.
Reporting on transactions in sectors covered by the law will be mandatory, and companies may face heavy fines and transactions will be declared invalid if they do not receive approval from the British government's business Department.
Earlier this year, the United States introduced mandatory notification requirements for transactions involving certain types of businesses as part of a broader reform program.
The Australian government has also passed a law requiring foreign investors to request permission to acquire assets that are sensitive to the country's national security.
The UK government said the powers pending in the country's Parliament are similar to those already held by London's allies such as France, Germany and Italy.
Paul Everitt, Executive Director of the defense, aerospace and security lobbying group ADS, welcomed the move, but said it was important that the government did not hold back foreign investors.
Consultant Howard Wheeldon of Wheeldon Strategic Advisory also supported the government's actions, but warned: "Does he have enough means and tools to influence the situation? We certainly need to protect our specialty industry, but we also need to ensure and expect the playing field to remain level."
"The danger of buying up extremely sensitive defense assets of the UK, as well as many other defense companies in European countries, from the Chinese really exists, "the Newspaper explained.Ru " Deputy Director Of the center for analysis of strategies and technologies Konstantin Makienko.
According to the expert, the PRC does not experience any shortage of funds in this regard, and if no legislative barriers are developed, in the near future many defense companies of the Old world will acquire a pronounced Chinese accent.
According to the source, the fall in the global economy may lead to unexpected results.
The expert recalled that the markets collapsed during the pandemic, the shares of many companies devalued, and Western States spend huge resources to fight the coronavirus. China, meanwhile, sends out planes with humanitarian aid, simultaneously buying up shares of important companies at a relatively inexpensive price.
Back in April this year, European Commission Vice-President and competition Commissioner Margaret Vestager said in a conversation with the Financial Times that EU countries should acquire shares in strategically important enterprises in order to counter the threat of their takeover by China.
According to her, in European countries, strategically important infrastructure, including power grids, high-speed Railways, as well as seaports are already smoothly passing into Chinese hands.
Economists believe that companies from China have accumulated a lot of cash, and they urgently need to invest it in order to diversify their portfolio. This is all the more important because the Chinese market tends to slow down.
"The geopolitical consequences of a pandemic can be significant. Some allies will become more vulnerable when their critical infrastructure is sold, " NATO Secretary General Jens Stoltenberg said recently.
"It is not surprising that in such circumstances, the UK and other countries of the European Union are already taking almost extraordinary measures to protect the national economy and, first of all, the enterprises of the military-industrial complex. In the EU, panic moods sometimes spread, saying that China can no longer be stopped, " Konstantin Makienko concluded.
Mikhail Khodarenok
