China has spent a record £1.8billion in six months buying British companies and technology as it plots to develop its own digital giants.
Companies backed by the Beijing government have launched an assault on chip makers and digital firms since the start of the year.
Yesterday another UK firm was about to fall into Chinese hands with chip- maker Telit targeted for its technology which provides cars with software that recognises road lanes and parking assistance.
The deal will see it sold for £80million to TUS International, a company controlled by a Beijing university.
Chinese hands: UK chip-maker Telitl will be sold for £80m to TUS International, a company controlled by a Beijing university
Overall nearly £17billion of takeover deals were announced by Chinese companies in Europe in the first half of 2018, according to a study by law firm Baker McKenzie and research group Rhodium Group.
But the City has become a key target because of the internationally recognised high standard of its tech sector.
Other high-profile takeovers recently have included the Chinese division of British tech giant ARM Holdings, iPhone chip maker Imagination Technologies, travel website Skyscanner, special-effects firm Framestore and walkie-talkie supplier Sepura.
The Missing Chief Exec
Telit is embroiled in an ongoing scandal over claims a former chief executive is a fugitive from justice.
Former boss of the tech firm Oozi Cats, also known as Uzi Katz, was accused of fleeing fraud charges in the US in the 1990s.
Telit hired investigators to look into the matter and Cats, who lived in Rome, later resigned.
He is still believed to be living in Italy and has not returned to the UK.
The research published yesterday also found recent investment from China had dramatically shifted away from the US and over to European countries.
This was partly due to escalating trade tensions between Washington and Beijing, with official attitudes in the US hardening towards active Chinese buyers.
President Donald Trump has already blocked several takeover bids for companies making technologies that have possible military applications.
The US is concerned about Chinese firms that have links to the government.
There is also unease about the ‘Made In China 2025’ plan, in which the government has identified high-tech industries, such as artificial intelligence and driverless cars, that it wants to dominate in future.
The restrictions in the US have prompted Chinese investors to look elsewhere, particularly in countries where takeovers are more likely to be approved, according to Baker McKenzie partner William Holder.
Thilo Hanemann, of Rhodium Group, said: ‘Chinese investors are favouring Europe. Regulatory hurdles remain lower, political relations are more predictable and Europe offers a great base of industrial high-tech assets.’
The British Government recently unveiled rules that would give it greater powers to step in and block deals.
Several critics, such as former Tory defence minister Sir Gerald Howarth, have warned takeovers involving Chinese companies were being let through too easily.
Sir Gerald has said: ‘We need to develop a proper strategy for this because there are some countries, including China, who are working against our interests.’