Chinese acquisition

While undertaking research into a Chinese acquisition of a British semiconductor company in Lincolnshire, He noted that the Chinese company wanted to learn advanced technologies from the UK enterprise, but also taught the business how to design and manufacture power electronics for the railway industry.

"Within a few years, the Chinese firm helped its British subsidiary upgrade production lines, established a new R&D center and significantly expanded the R&D personnel and budget," He said. "This enabled the British firm to continue developing its technologies and capacity."

This relationship allowed authorities in Lincolnshire and Hunan province－where the Chinese enterprises is based－to further enhance business exchanges between the two regions. Among other benefits, this resulted in a 112 percent increase in Hunan's trade with the UK in 2019, amounting to $1.4 billion, He said.

In recent months, the UK has increased its scrutiny over Chinese investment and acquisitions. In July, the government said it would remove Huawei from the UK's 5G infrastructure over national security concerns. That marked a U-turn on its own earlier decision to allow the company a limited role.

Based on his research on Chinese acquisitions of British companies that already owned advanced technologies, He said there was "convincing evidence showing that the Chinese acquiring firm, despite its primary knowledge-seeking motivation, brought new knowledge into the British firm and helped the latter further upgrade their technologies and competitiveness".