British banks, including HSBC and Standard Chartered, are lobbying against proposed limitations by Rishi Sunak on conducting business with China. They are advocating for China to be placed in a less severe risk category in the new national security law.
If China remains in the strictest category, companies may have to disclose various dealings with entities believed to be under Chinese state’s control. This has the potential to hinder business operations and bring negative publicity. Tensions between the UK and China have escalated due to disagreements over China’s governance of Hong Kong. Both sides have also accused each other of espionage.
With 32,000 Chinese companies based in the UK, the impact of the new legislation could be significant. The debate over how closely businesses should engage with China has become a major political issue in the UK. The top 970 Chinese companies in the UK are likely to face consequences, sparking debates on whether companies like TikTok and Huawei should register.
A crackdown on business dealings with China could prompt Beijing to retaliate, possibly expanding its restrictions on data exports and encouraging government-owned entities to transition to domestic systems.
