An international spying pact with its eyes on China’s growing global reach has cleared the path for UK investors to buy into more U.S. real estate.

The move comes as the U.S. ponders a series of Chinese spy-balloon overflights and as UK-China tensions begin to rise again.

The Five Eyes security pact between the U.S., UK, Australia, New Zealand and Canada is at the root of the latest move.

The decision addresses concerns that the UK could be a back door for hostile states to buy into key security and national infrastructure.

U.S. security allies in the Five Eyes pact are expected to follow tougher rules in view of their shared spying technology and networks — and granted special status if they follow them.

Investors from the UK are now less constrained in the U.S., and vice versa. The main benefit is that investors won't be subject to national security reviews of real estate deals.

The focus of the decision is squarely on China, particularly on Chinese tech giants such as Huawei.

The relaxation extends to owning minority stakes in businesses, and real estate transactions, but not to controlling stakes in business, and it responds to new controls in the UK’s National Security and Investment Act, which has allowed the government to block takeovers of tech businesses and know-how firms in Wales and Manchester.

The U.S. had until 13 February to decide whether to continue to exempt UK companies from scrutiny of deals in areas including real estate. It decided last Friday to extend the exemption, and the decision was heavily influenced by recent decisions to stop Chinese investment in UK companies, and ramp up intelligence ties to counteract China, the FT reported.

The U.S. Department of the Treasury acted on advice from Janet Yellen’s Committee on Foreign Investment in the United States to add the U.K. and New Zealand to the list of foreign states exempted from investment constraints.

It follows an assessment that both countries have robust foreign investment screening programs that would stop hostile government’s buying into key positions.

“This ensures those countries’ continued status as excepted foreign states pursuant to CFIUS regulations and the Foreign Investment Risk Review Modernization Act of 2018, absent further action from CFIUS," a statement said. "With this action qualifying investors from all Five Eyes countries will now continue to benefit from exception from CFIUS jurisdiction over certain non-controlling transactions, real estate transactions, and mandatory filing requirements as established under law."

“Today’s actions reflect that our Five Eye allies have all stood up and implemented their own robust foreign investment screening programs. We look forward to continuing to coordinate with all of them on matters relating to investment security,” Assistant Secretary for Investment Security Paul Rosen said.

Canada and Australia were exempted from the rules in 2021. The rules date to changes introduced by then-President Donald Trump in 2018 in reaction to concern about Chinese investment in the U.S.