UK prime minister Rishi Sunak is considering following Washington’s lead by imposing new restrictions on domestic companies making investments into critical industries in China.
US president Joe Biden has been drawing up a plan to limit investments in key parts of the Chinese economy by American companies that is yet to be announced.
“I think the US is still formulating their thinking on that space, they haven’t published [yet] . . . but we are engaged in a dialogue with them. We are also doing policy thinking on that particular area,” Sunak told journalists on Wednesday on the plane to Japan for the G7 summit of global leaders.
Sunak said that any joint action over tougher controls on western investments in China was still a work in progress and would not be agreed at the G7 summit given the US had not yet “fully formed view”.
But the prime minister added: “In broad terms, absolutely, that will be something we will be talking about.”
Placing further export controls on China will also be discussed by western allies in Hiroshima with “economic security” high on the agenda, Sunak said.
The prime minister said western allies were “well aligned” on their economic approach to China ahead of the G7 summit with “very similar” dialogue taking place between the US, UK, Australia, Canada and Japan as each country develops its strategy.
“There’s a separate conversation to be had on export controls, which we already have, and you’d expect that to be a feature of the conversations,” Sunak said.
Biden last year urged his administration to pay close attention to investment deals with China involving critical technologies such as semiconductors.
The White House indicated it was considering issuing an executive order to create a screening mechanism for outbound US investment, just one of many efforts to make it harder for Beijing to obtain cutting-edge technology.
Liz Truss, Sunak’s predecessor as prime minister, on Wednesday made a controversial speech in Taiwan calling for the island nation to be included in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) — a trade agreement between 11 countries — which the UK recently joined to strengthen economic ties with Asia.
She also called on Sunak to more clearly designate China as a “threat” to the West.
Sunak said he had not followed the details of Truss’s trip but ruled out the idea of changing Britain’s foreign policy on Taiwan. “I tell you that our approach to Taiwan is longstanding and it hasn’t changed.”
Asked specifically whether Taiwan should join CPTPP, he indicated otherwise: “I think that we have a very strong unofficial relationship with Taiwan as our allies do. Our position . . . will continue.”
James Cleverly, foreign secretary, gave a speech in London in April arguing that isolating China would not be in the UK’s interests.
“It would be clear and easy — and perhaps even satisfying — for me to declare some kind of new cold car and say that our goal is to isolate China,” Cleverly said.
“It would be clear, it would be easy, it would be satisfying and it would be wrong. Because it would be a betrayal of our national interest and a wilful misunderstanding of the modern world.”