Britain blocks Chinese company’s deal to acquire camera technology as it could pose risk to national security

University of Manchester had reached deal to license camera technology to Beijing Infinite Vision Technology
First time Britain’s Business Secretary Kwasi Kwarteng has used new national security powers to block licensing deal

Mergers & Acquisitions

Chad Brayin London

Published: 9:00pm, 21 Jul, 2022

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Britain’s business secretary has blocked the University of Manchester from sharing motion camera technology with a Chinese firm, using new national security powers to stop a licensing deal for the first time.

Kwasi Kwarteng, the business, energy and industrial strategy secretary, stopped the university from sharing Scamp-5 and Scamp-7 camera technology with Beijing Infinite Vision Technology, a maker of 3D rendering technology used in architectural design, multimedia displays and animation.

“There is a potential that the technology could be used to build defence or technological capabilities, which may present national security risk to the United Kingdom,” Kwarteng said in the final order. “Those risks would arise on the transfer of the intellectual property to the acquirer.”

In addition to 3D renderings, the technology can be used in nanny cameras, drones and other surveillance equipment. The technology allows cameras to process large numbers of images more efficiently.

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Beijing Infinite Vision Technology did not immediately respond to a request for comment on Thursday.

It was the first time the business secretary used new powers to block a deal under the National Security and Investment Act 2021, which came into force in January and gives the British government powers similar to the Committee on Foreign Investment in the United States (Cfius) to stop transactions that might harm national security.

Kwarteng is separately conducting a full national security assessment of the £63 million (US$75 million) acquisition last year of the country’s biggest semiconductor maker Newport Wafer Fab by Nexperia, a Dutch subsidiary of China’s Wingtech Technology.

The acquisition of Newport Wafer Fab by a company ultimately controlled by a Chinese firm has raised concerns among members of British Prime Minister Boris Johnson’s Conservative Party, who have said the company is of economic and strategic importance.

British Business Secretary Kwasi Kwarteng leaves Downing Street in London on July 12. Photo: Reuters

Nexperia has hit back at claims that it would potentially shut down the Newport plant in South Wales and move production to China, saying there is no “factual basis” for such claims.

In response to a parliamentary inquiry on the British semiconductor industry, Nexperia said it was not controlled by the Chinese government and highlighted its European credentials as a Dutch company.

“Nexperia’s management team predominantly consists of European and US industry veterans who have served long careers at companies such as Texas Instruments, Infineon, Royal Philips, NXP, and other leading global semiconductor companies,” the company said in a written testimony in June.

The greater scrutiny of technology deals by Chinese and other foreign firms comes as Sino-British relations have soured in recent years over issues ranging from the implementation of a controversial national security law for Hong Kong and purported human rights abuses in the Xinjiang Uygur autonomous region in western China.

In May, Kwarteng said he planned to stop all foreign aid to China from the UK, saying the money could be used better in other countries.