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A special congressional task force aimed at countering threats from China is urging the Biden administration to block a proposal to sell Britain’s largest microchip factory to a Chinese company. A company that US lawmakers say has close ties to the ruling Communist Party in Beijing.
The Republic-led China Task Force warned in a letter to President Biden this week of the security risks associated with the proposed takeover of Newport Wafer Fab (NWF), a key player in the UK’s semiconductor industry, by Nexperia, a Netherlands-based semiconductor. Manufacturer acquired by China-based Wingtech Technology. US lawmakers described the new parent company as essentially a “state-owned enterprise” of the People’s Republic of China (PRC).
“This issue requires urgent action,” the lawmakers wrote. “We encourage your administration to use all necessary means to avoid this outcome, including by conducting direct diplomacy with the UK government, reconsidering the UK’s status on the CFIUS ‘white list’ of the United States, and restricting exports. We’re calling. To the NWF.”
The April 19 letter was signed by Representative Michael McCaul, Chairman of the Texas Republican China Task Force with the House.
GOP Representative Mike Gallagher of Wisconsin, Michael Waltz of Florida, Guy Reschenthaler of Pennsylvania, Robert J. Wittman of Virginia, Neal Dunn of Florida, Mark Green and Diana Harshbarger of Tennessee and Young Kim of California.
The task force is made up entirely of Republicans because Democrats, who control the majority in the House, refused to participate when the body was created in 2020.
The deal made headlines in the US and UK, but there was no immediate reaction to this week’s letter from the Biden administration. The BBC described Nexperia as “Chinese owned” despite its headquarters in the Netherlands.
After Politico reported earlier this month that British authorities had quietly approved the sale of NWF to Nexperia, the BBC reported that Minister of State for Business, Energy and Industrial Strategy Kwasi Kwarteng “could intervene and intervene”.
“Any such move by Kwasi Kwarteng over concerns that key infrastructure in the UK will fall into Chinese hands will [UK government’s] The National Security and Investment Act,” the news agency reported on April 1, adding that Prime Minister Boris Johnson had asked his national security adviser to review the purchase last year.
In its letter to Mr Biden, the Republic-led China Task Force claimed that the British government had “recently established an investment review regime under the National Security and Investment Act to fully ensure oversight and scrutiny of such transactions.”
“The PRC’s attempt to buy the NWF serves as a critical test case of Britain’s willingness to use its new powers to address a common security concern over critical technology,” said MPs, who said the Biden administration could take action through the CFIUS. – The agency’s executive arm within the U.S. Department of the Treasury with the power to review national security-related business deals.
Perhaps best known for examining foreign corporations’ takeovers or acquisitions of U.S. companies for national security issues, the CFIUS maintains an elite “white list” of “exceptional foreign states” whose investments in the U.S. economy are exempt from certain scrutiny standards. It is one of four countries on the list, along with the UK, Australia, Canada, and New Zealand.
The China House of Representatives Task Force has suggested that this could change if the UK government allows the NFW-Nexperia deal to happen.
“Given that the CFIUS ‘whitelist’ was created under the premise that exempt countries would maintain their own equivalent investment guarantees, any approval of the NWF agreement would necessarily question the loyalty of the UK’s entire review process,” the MPs said.