Chinese Firm Blocked From Accessing Key Information About UK’s Power Grid

Business Secretary Jacob Rees-Mogg is seen in Westminster, London, on Sept. 21, 2022. Rob Pinney/Getty Images

The UK government has blocked a Chinese firm from accessing sensitive information about Britain’s power grid, as concerns grow about Beijing’s involvement in critical infrastructure in the West.

Redrock Investment Limited, a subsidiary of China’s state-owned State Development & Investment Corporation (SDIC), is set to obtain a 35 percent stake in Electricity North West (ENW), a British operator of the network distributing electricity to the northwest of England.

In a “final order” issued on Sept. 29, Business Secretary Jacob Rees-Mogg said the deal poses a risk to the UK’s national security.

The government order allows the acquisition to go ahead “subject to provisions designed to mitigate the risk to national security.”

Under conditions imposed by the government, the sharing of information from ENW to Redrock will be restricted.

The government also restricted the Chinese state firm’s influence over appointments of key staff members at ENW.

Rees-Mogg said the final order, issued under the UK’s new National Security and Investment Act, is “necessary and proportionate to mitigate the risk to national security.”

A spokesperson for ENW said, “We note the order from BEIS [Department for Business, Energy and Industrial Strategy] and confirm that we will fully comply with its requirements.”

A government spokesperson said, “The government is required to publish a Final Order Notice when imposing remedies on a particular acquisition, and has done so today.”

“The business secretary has powers under the National Security and Investment Act to intervene in transactions on national security grounds where necessary,” the spokesperson added.

Security Concerns

The move was the latest attempt by the UK government to limit Chinese involvement in UK businesses, especially in critical national infrastructure and in the tech sector.

The decision was made under the National Security and Investment Act 2021, which came into force on Jan. 4 in possibly the biggest shake-up of the UK’s national security regime in 20 years.

The act grants new powers to the government to scrutinise and intervene in certain acquisitions made by anyone—including businesses and investors—that could harm the UK’s national security.

In July, the then-Business Secretary Kwasi Kwarteng used the act to block Beijing Infinite Vision Technology Co. from buying vision-sensing technology from the University of Manchester.

In August, Kwarteng ruled that the acquisition of Pulsic, a Bristol-based electronic design company, by a Hong Kong-based firm shouldn’t proceed, because Pulsic’s intellectual property and software could be used to “facilitate the building of cutting-edge integrated circuits that could be used in a civilian or military supply chain.”

Under the law, the government is also carrying out an investigation into the takeover of Newport Wafer Fab by Nexperia, a Netherlands-based subsidiary of the Chinese smartphone manufacturer Wingtech Technology.