Government warns tech firms about working with China

A new website to help companies strike business deals with the world's second largest economy highlights an increasingly uneasy relationship

The government has launched a new website warning technology firms about the risks of operating in China and accepting Chinese investment

The site, which carries the slogan "China. See the potential. Know the Challenge", says it is designed to help digital and tech companies "navigate the country’s unique marketplace in ways that reflect the UK’s values and take account of national security concerns." 

Called Digital and Tech China, the website represents the uneasy relationship the UK is developing with China, as the government becomes increasingly aware of both risks and opportunities presented by working with the world's second largest economy.  

In a statement, digital and culture minister Caroline Dinenage said: "We recognise the ethical, legal and commercial questions businesses face when they work in China or with Chinese businesses."

But she also highlighted the opportunities of working with the country. Bilateral trade now exceeds £76 billion while British AI unicorns – Improbable and Blue Prism – have launched in China, with more companies expected to follow.

The Digital and Tech China site includes resources such as a list of FAQs companies might ask themselves before setting up in China, "things to consider" for firms looking to export to China and links to specialist sites. 

In the Due Diligence section for firms looking to receive investment from China, the website says: "Ask a Chinese-speaking colleague or contact to spend some time on Baidu or Google researching the company. This will help to detect any issues of concern such as court cases, bribery allegations, or unexpected commercial or political ties."

Elsewhere, the website reads: "While there are many opportunities, there is a risk that your company’s technology could be used to violate human rights, posing a significant risk to your business’s reputation."

The government highlights China’s use of facial recognition and predictive computer algorithms for mass surveillance, profiling and repression of ethnic minorities in the northern Xinjiang region such as Uyghur Muslims. 

A new draft law banning the involvement of Chinese telecoms giant Huawei in the UK's 5G network was also unveiled on Tuesday.

"I think this is really a hardening of the attitudes towards China," said Emily Taylor, CEO of Oxford Information Labs, a company which monitors global technology policy, referring to both the draft law and the website.

She linked this new attitude to the new technology standards China has been campaigning for at the United Nations, which include a different way of naming and addressing internet sites and a system that could permanently link individuals or devices to online identifiers. 

"I think that this has really crystallised a lot of concerns about China and technology over the past few months," Taylor added.

The government in July announced that no new Huawei equipment can be bought from the end of this year and all of the Chinese firm's equipment has to be removed from 5G networks by 2027.

The United States has described Huawei as a "threat to national security" and "beholden to the Chinese Communist Party", prompting denials from the firm and diplomats.

The decision strained already fraught ties between London and Beijing over the latter's treatment of Hong Kong and the repression of ethnic Uighurs in the western Xinjiang region.

Britain insisted its policy reversal was prompted by US sanctions that blocked Huawei access to crucial microchips at the heart of 5G networks.