The UK government has blocked Hong Kong-based firm Super Orange from purchasing British electronic-design company Pulsic, citing security risks posed by China.
A statement Wednesday said Britain's Business Secretary Kwasi Kwarteng "considers that the final order is necessary and proportionate to mitigate the risk to national security".
Pulsic, a small-sized company based in Bristol, western England, designs software used in electronic circuits.
Foreign Secretary Liz Truss, the favourite to replace Boris Johnson as prime minister, has urged a tougher approach to China and has warned Beijing of sanctions if it did not play by international rules.
A 2021 UK government review called China "the biggest state-based threat to the UK's economic security".
But it needed fierce political pressure from Washington for the UK to ban Chinese technology giant Huawei from involvement in the roll-out of Britain's 5G network.
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