UK response to Chinese spying ‘completely inadequate’, report finds

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The government’s response to China’s “increasingly sophisticated” spying operation targeting the UK and its interests has been “completely inadequate”, according to a scathing parliamentary report.

Sir Julian Lewis, chair of the Intelligence and Security Committee, said at the report’s launch on Thursday that experts had delivered a “damning appraisal” of the government’s approach to the threat posed by Beijing.

They concluded the UK had “no strategy on China, let alone an effective one” and that it was “singularly failing to deploy a ‘whole-of-government’ approach” to the problem of China “prolifically and aggressively” seeking to interfere, Lewis said.

The report comes days after Oliver Dowden, deputy prime minister, described China as the “largest state-based threat” to Britain’s economic security, although he said he did not want the UK to decouple from the country.

The ISC inquiry, which was commissioned in 2019 to examine the threat posed by China across academia, industry and technology, found that Beijing “seeks to influence elites and decision makers to acquire information and intellectual property” and that Chinese companies, academic institutions and citizens were liable to being co-opted into espionage and interference.

The committee found that the UK was of “significant interest to China” when it came to espionage and interference because of its close relationship with the US but fell “just below China’s top priority targets”, Lewis said.

He called on the government to “adopt a longer-term planning cycle” and get its “house in order” to ensure the future security of the UK was not damaged by election cycles and that “security concerns are not constantly trumped by economic interests”.

The committee, which comprises nine MPs and peers and scrutinises Britain’s intelligence agencies, also called for an urgent review into China’s continued involvement in the nuclear industry.

Lewis noted that without swift and decisive action, a “nightmare scenario” could emerge where China steals blueprints, sets standards and exerts influence at every step, which could pose “an existential threat to liberal democratic institutions”.

Prime Minister Rishi Sunak has sought to strike a complex balance between trying to neutralise security threats posed by China — notably by banning some technologies — and maintaining and even enhancing engagement in some areas such as trade, investment and climate change.

In response to the report, Sunak said the committee “took the bulk of its evidence in 2020”, predating both the 2021 Integrated Review into security and foreign policy and the review’s update in 2023. “The government has already taken actions that are in line with many of the committee’s recommendations,” the prime minister said.

Kevan Jones, a Labour MP on the committee, described Sunak’s response as “weak”. “Was this known ten years ago? Yes it was .. Was it taken into account, clearly not.”

Britain has also come under increasing pressure from the US to harden its stance against China, as tensions between Washington and Beijing have mounted due to increased protectionism and fears of espionage.

The report found that China’s size, ambition and capability had enabled it to “successfully penetrate every sector of the UK’s economy” and that it had been “particularly effective at using its money and influence to penetrate or buy academia in order to ensure its international narrative is advanced”.

According to figures published earlier this week, the UK used its relatively new national security powers to “call in” eight transactions involving Chinese-linked investment in British companies in the past year, underlining the government’s concern about the potential for Beijing to gain influence over vital industries. 

Ministers used powers conferred by the National Security and Investment Act to call in 65 investments during the 12-month period to April, with more than 40 per cent of those associated with China.

However, in its report, the ISC criticised the government for not putting in place any independent oversight of the decisions being made under the act.

Earlier this year, the UK government updated its foreign and defence policy to describe China as an “epoch-defining challenge”, though it stopped short of calling the largest Asian nation a “threat”.