Biden is under pressure from the Republicans over a Chinese deal to build a British chip factory

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A special congressional task force aimed at countering threats from China is calling on the Biden administration to block the proposed sale of Britain’s largest microchip factory to a Chinese company. U.S. lawmakers believe the company has close ties to Beijing’s ruling Communist Party.

In a letter to President Biden this week, the Republican-led China Task Force warned of security risks tied to the proposed takeover of Newport Wafer Fab (NWF) — a key player in the UK’s semiconductor industry — by Nexperia, a Dutch-based semiconductor maker which was bought by China-based Wingtech Technology. The U.S. lawmakers described the new parent company as essentially a “state-owned enterprise” of the People’s Republic of China (PRC).

“This matter requires urgent action,” the lawmakers wrote. “We urge your administration to employ all tools necessary to prevent this outcome, including engaging in direct diplomacy with the UK government, reconsidering the UK’s status on the Committee on Foreign Investment in the United States (CFIUS) ‘white list,’ and restricting exports to NWF.”

Rep. Michael McCaul (Texas Republican) signed the April 19 letter.
GOP Rep. Mike Gallagher from Wisconsin, Michael Waltz in Florida, Guy Reschenthaler in Pennsylvania, Robert J. Wittman out of Virginia, Neal Dunn out of Florida and Mark Green.

The task force is made up entirely of Republicans, as Democrats who control the majority of the House refused to take part in its creation in 2020.

There has been no immediate reaction from the Biden administration to this week’s letter, although the deal has made headlines in the U.S. and the UK. The BBC described Nexperia as being “Chinese-owned,” despite having its headquarters in the Netherlands.

After Politico reported earlier this month that British authorities had quietly approved the sale of NWF to Nexperia, the BBC reported that Secretary of State for Business, Energy and Industrial Strategy Kwasi Kwarteng “can, and still might, intervene.”

“Any such move by Kwasi Kwarteng, over concerns of key UK infrastructure falling into Chinese hands, would be under the [UK government’s] National Security and Investment Act,” the news outlet reported on April 1, adding that Prime Minister Boris Johnson asked his national security adviser to examine the buyout last year.

In its letter to Mr. Biden, the Republican-led China Task Force asserted that the British government “recently created an investment review regime under the National Security and Investment Act to provide oversight and scrutiny of precisely this kind of transaction.”

“The PRC’s attempt to acquire NWF serves as a critical test case of the UK’s willingness to exercise its new authorities to address a shared security concern regarding critical technology,” wrote the lawmakers, who said the Biden administration could take action via CFIUS, a multi-agency executive branch arm within the U.S. Treasury Department that has the power to review business deals with national security implications.

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