The flagship news publication of the Chinese Communist Party has launched a broadside against the UK government for its latest clamp down on overseas investment, while taking the opportunity to attack similar protectionist measures in the EU and US.
The UK government recently proposed new rules to protect key British companies from foreign acquisition should the deals compromise national security.
According to Greg Clark, Secretary of State for Business, Energy and Industrial Strategy the new rules will permit government intervention against deals involving companies that “design or manufacture military and dual use products, and parts of the advanced technology sector.”
The move means that the threshold for government intervention in foreign acquisitions could fall from companies with operating revenues of 70 million pounds to those with operating revenues of 1 million pounds, while the threshold of a 25% market share could be cancelled completely.
Economist Mei Xinyu (梅新育) has slammed the decision in a People’s Daily editorial entitled “The Grand Gate to China Will Only Open Further” (中国开放的大门只会越开越大), accusing the UK of hypocrisy and claiming that its new policy is antithetical to its history as a free trade advocate, as well as the interests of the global economy.
“The UK is the ancestral homeland of liberalism and free trade theory, and for the past hundred years was considered the most free and open leading economy in Europe,” writes Mei. “Is it not extraordinary that today the secretary of commerce in the home of Adam Smith and David Ricardo is proposing views opposed to free trade?”
Mei also took the opportunity to criticise other Western economies for the adoption of similar protectionist stances, while touting China’s own trade liberalisation credentials by contrast.
“Germany has already promulgated and implemented new laws that restrict acquisitions by foreign capital, and obtained the the vigorous support of the Eurozone, as well as the two other main pillars of the EU, France and Italy.
“New protectionist policies could spread to all of the EU. In addition to this the current state of US foreign economic policy is ‘America First.'”
“There is nothing that better illustrates the stark difference between China and the spirit of the West. The former is full of confidence, and further expanding its openness to foreign investment, while the latter is tightening policies against the foreign trade and foreign business that it needs for its economic and social development.
“In 1840 British ships used opium and cannons to pry open the gates that the Qing government used to keep the nation closed. 177 years later, China has now strengthened, and the Chinese people stand in the world’s east with a completely new attitude. Yet at this time, the West is on the retreat…”
“Given the stark difference in eastern and western attitudes and policy inclinations, why shouldn’t confident overseas investors and capable scientific and tech talent flock to China?”