New report finds China has successfully accessed every sector of UK economy

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• Cherubin Okende, a Congo opposition spokesman, was shot dead in the capital Kinshasa.
• The cast of Oppenheimer left its premiere as thousands of Hollywood actors prepared to join writers on strike.

The UK has left itself vulnerable to Beijing after successive governments “readily” accepted Chinese money with “few questions asked”, according to a damning new parliamentary report. 

So what? In 2015 George Osborne, then chancellor, hailed a “golden era” in relations between the UK and China. Over state visits and pub pints, deals were announced opening the UK’s nuclear and tech industries to Chinese investment. That was a mistake, says the influential all-party intelligence and security committee (ISC), which oversees Britain’s spy agencies. 

A long-awaited report concluded that China is “aggressively and prolifically” focused on the UK and has successfully accessed every sector of the economy, notably: 

• Nuclear: While the threat of disruption is unlikely, the report says allowing Chinese involvement in the UK’s civil nuclear programme was effectively ceding control to the Chinese Communist Party. 
• Academia: The UK’s academic sector offers “a rich feeding ground” for political and economic influence with a risk of intellectual property (IP) theft. Sensitive research areas should be better protected.
• Intelligence: The committee said that Chinese spies had “routinely” targeted former and current civil servants for information, with one intelligence officer gaining access “to at least one UK Parliamentarian”, although the UK “does not appear to have suffered” election interference, as in Australia.  

Ball, dropped. The British government does not have “any strategy on China, let alone an effective one”, according to expert witnesses quoted in the report, which was commissioned in 2019. 

There is no whole-of-government approach, in stark contrast to that being run out of Beijing. The UK is now “playing catch-up”, without the necessary resources or expertise across Whitehall. 

British governments tend to think in election cycles. Some of Beijing’s planning documents are thinking ahead to 2049.  

Why it matters: The UK is “just below China’s top priority targets” but is useful for its proximity to the US and others, the report said (the UK is a member of the Five Eyes, an alliance of intelligence agencies). China has invested more money in the UK since 2000 than in France, Germany and Italy combined.   

Rishi Sunak said yesterday the committee had taken “the bulk of its evidence” from 2020 and the government had strengthened its position on China since then. This was countered by Sir Julian Lewis, the committee chair, who pointed to a “record of resistance” from Downing Street to the committee’s scrutiny.

Breaking up is hard to do. In May 2023, Sunak said the UK was “de-risking” but not “de-coupling” from China.

Germany is doing the same thing, but it’s several steps ahead of the UK. Germany approved its first national strategy on China yesterday. 

• Beijing is Germany’s largest trading partner and almost half of German manufacturing companies rely on China at some point in their supply chain. 
• But the new strategy calls on German businesses to diversify their supply chains and makes it clear the government will not bail them out if they get into trouble;

• China’s decision to expand its relationship with Russia has direct security implications for Germany, the review says; and
• Germany will review its export controls to protect sensitive technologies. 

The new strategy is a “much-needed first class funeral for (former Chancellor Angela) Merkel’s delusions of a ‘comprehensive strategic partnership’” with Xi Jinping’s China, said Thorsten Benner of the Global Public Policy Institute.

Both Germany and the UK want to maintain commercial ties with China; James Cleverly, the UK’s foreign secretary, is planning a visit to Beijing soon. 

But the UK could learn something from Germany’s attempt to set a more coherent approach.