Former Spy Boss Calls For UK To Stop China Buying Western Firms

EnterpriseGovernement-ITMerger and acquisitionRegulationSecuritySecurity Management

Former head of MI6 says the West needs to stop China getting strategic technology by acquiring Western firms, as technology rivalry with the West rises

The former head of the UK’s MI6 has stepped into the debate regarding China acquiring strategic technology from Western firms.

John Sawers was the chief of the Secret Intelligence Service (MI6) from 2009 to 2014, and he said that the West needs to keep stop Chinese firms acquiring Western firms with strategic tech, as the technology rivalry between China and the West deepens.

The intervention comes after a prominent British lawmaker David Davis MP called on the British government last week to prevent China from removing the technology base of Imagination Technologies to mainland China.


Imagination Technologies

The British chip designer had placed the ‘for sale’ above its doors in June 2017 after its chip licensing row with Apple a couple of years ago threatened its very survival.

In April 2017 Apple said it would stop paying Imagination royalties for the GPU technology used in iPhones, iPads, Apple Watches and other mobile devices. That news crashed the shares in the UK company by 70 percent.

Aside from gaming, GPUs are also useful in computers used for artificial Intelligence and data transfer.

Apple was Imagination’s largest customer, and accounted for around half its annual revenue. It was also an 8 percent shareholder, but had denied any intention to buy the British firm.

Apple even set up an office not far from the Kings Langley headquarters of Imagination Technologies, fuelling concerns it was poaching key staff from the British firm. The firm still has 550 staff in the UK.

That Apple dispute took a toll on the chip designer, and in September 2017 Imagination Technologies was acquired by Chinese-backed private equity firm Canyon Bridge for £550 million.

But that triggered concerns back then, as Canyon Bridge’s main investor is state-backed China Reform Holdings.

Indeed, because of this Canyon Bridge had been blocked by the Trump administration from buying US chip firm Lattice Semiconductor because of national security concerns.

Canyon Bridge had been based in California, and in 2017 then Prime Minister Theresa May approved its acquisition, as she said that Canyon Bridge would be governed by US law.

However, while Canyon Bridge was originally incorporated in the United States, it has since moved its headquarters to the Cayman Islands.

Spy boss

Into this heady atmosphere, former MI6 boss John Sawers was quoted as saying by Reuters that the West needs to stop China buying up strategic technology including companies such as British semiconductor chip designer Imagination Technologies.

Sawers did reportedly state that China was seeking to expand its global clout, although it was not the same existential threat that the Soviet Union once was.

“I don’t think it’s an existential threat in the way the Soviet Union was in the Cold War but nevertheless there is going to be deep rivalry over control of technology,” Sawers told Sky. “We have more to do in the West to make sure we are independent of China.”

“We need to do more to protect Western technology from being bought up by Chinese companies and I think the efforts being made to ensure Imagination isn’t pulled out of the UK and bought up by China is the right thing to do.”

Do you know all about security? Try our quiz!

Read also :
Author: Tom Jowitt
Click to read the authors bio  Click to hide the authors bio