The Intelligence and Security Committee of Parliament

“ The nature and scale of the Chinese Intelligence Services are—like many aspects of China's government—hard to grasp for the outsider, due to the size of the bureaucracy, the blurring of lines of accountability between party and state officials, a partially decentralised system, and a lack of verifiable information. ”

“ The strengths which Russia retains are largely its inheritances from the USSR and its status as a victor of the Second World War: nuclear weapons, a space presence and a permanent seat on the UN Security Council. By contrast, it has a small population compared with the West; a lack of both reliable partners and cultural influence outside the countries of the former USSR; a lack of strong public and democratic institutions, including the rule of law; and, of course, a weak economy. ”

“ While seeking to exert influence is a legitimate course of action, China oversteps the boundary, and crosses the line into interference in the pursuit of its interests and values at the expense of those of the UK. For example, China has been particularly effective at using its money and influence to penetrate or buy Academia in order to ensure that its international narrative is advanced and criticism of China supressed. ”

“ Despite its economic weakness, it nonetheless heavily resources its intelligence services and armed forces, which are disproportionately large and powerful. Moreover, Russia is adept at using its apparent weaknesses to its advantage: for example, its poor national brand and lack of long-term global friends appear to feed its enormous risk appetite – perhaps on the basis that it thinks it has nothing to lose; its lack of democracy and rule of law allows its intelligence agencies to act quickly, without constraint or consideration ”

“ Russia may spread disinformation or seek to influence political events for a wide range of purposes, but all in support of its underlying foreign policy objectives:
direct support of a pro-Russian narrative in relation to particular events (whilst some of the outright falsehoods which are put forward may not be widely believed, they may still succeed in casting doubt on the true account of events: "When people start to say 'You don't know what to believe' or 'They're all as bad as each other', the disinformers are winning" [6] ) ”

“ China sees almost all of its global activity in the context of its struggle with the US. The UK is also of interest given its membership of international bodies of significance to China and the perception of the UK as an opinion-former—which plays into China's strategy to reshape international systems in its favour. These factors would appear to place the UK just below China's top priority targets, as it seeks to build support for its current 'core interests': to mute international criticism and to gain economically. In respect of the latter, China sees the UK as a home for Chinese investment. ”

“ While there is a question as to whether China's overseas lending constitutes a deliberate ploy to trap countries in unsustainable debt, in October 2020 the Joint Intelligence Committee noted that China can use loans and renegotiations as leverage to advance its policy objectives, and that developing countries have often been eager customers for Chinese lending, as China typically has competitive prices, can disburse loans quickly, can lend at a scale required for many large infrastructure projects and has been willing to fund prestige projects. ”

“ Whilst it is possible that an improved relationship between Russia and the UK may one day reduce the threat to the UK, it is unrealistic to think that that might happen under the current Russian leadership. It would have to be dependent on Russia ceasing its acts of aggression towards the UK, such as the use of chemical weapons on UK soil. The UK, as a Western democracy, cannot allow Russia to flout the Rules Based International Order without there being commensurate consequences. ”

“ If the Government is serious about tackling the threat from China, then it needs to ensure that it has its house in order such that security concerns are not constantly trumped by economic interest. Our predecessor Committee sounded the alarm, in relation to Russia, that oligarchs are now so embedded in society that too many politicians cannot even take a decision on an investment case because they have taken money from those concerned. ”

“ The clearest requirement for immediate action is for new legislation: the Intelligence Community must be given the tools it needs and be put in the best possible position if it is to tackle this very capable adversary, and this means a new statutory framework to tackle espionage, the illicit financial dealings of the Russian elite and the 'enablers' who support this activity. More broadly, the way forward lies with taking action with our allies ”

“ China targets other countries’ technology, Intellectual Property (IP) and data in order to "bypass costly and time-consuming research, development and training". [55] This approach means it can exploit foreign expertise, gaining economic and technological advantages and thereby achieving prosperity and growth more quickly—and at the expense of others. Chinese dominance of technology has far-reaching consequences: a key issue in the 5G/Huawei decision was that there were few other options, such is the dominance of China in the market. ”

“ It is not just the oligarchs either: the arrival of Russian money resulted in a growth industry of enablers – individuals and organisations who manage and lobby for the Russian elite in the UK. Lawyers, accountants, estate agents and PR professionals have played a role, wittingly or unwittingly, in the extension of Russian influence which is often linked to promoting the nefarious interests of the Russian state. ”

“ The Intelligence Community must equip themselves to tackle the Russian threat, but we must also look beyond the UK itself. The Kremlin has shown a willingness and ability to operate globally to undermine the West, seeking out division and intimidating those who appear isolated from the international community. ”

“ China's size, ambition and capability have enabled it to successfully penetrate every sector of the UK’s economy, and—until the Covid-19 pandemic—Chinese money was readily accepted by HMG with few questions asked. China's commercial and industrial strategy is deliberately calibrated to establish China as an economic leader, a digital technology powerhouse and a global commercial power—on which the West is dependent. China has been buying up and seeking to control or influence the UK's Industry and Energy sectors: we have already mentioned China's interest in the UK's Civil Nuclear sector. ”

“ The Russian decision-making apparatus is concentrated on Putin and a small group of trusted and secretive advisers (many of whom share Putin's background in the RIS) . The limited number of individuals who are 'in the know' makes decision-making hard to understand, compared with systems where power and influence are dispersed among a great number of political players. Moreover, the President can make swift decisions that even his inner circle are not aware of – further complicating any ability to understand or predict Russian government intent. ”

“ The Government's lack of understanding contrasts with the approach of the US, which has already produced a national strategy on critical and emerging technologies, aimed at protecting its technological dominance, in which it lists what it considers to be its 20 priority technologies. The lack of action similarly to identify and protect UK assets from a known threat is a serious failure, and one that the UK may feel the consequences of for years to come. ”

“ While the Chinese clearly do interfere overseas when it serves their perceived national interest, they nevertheless strongly resist accusations of interference—in part because they do not wish foreign powers to interfere in China's own affairs. ”

“ With pressures from International Counter-Terrorism work, the Chinese threat, Iran and the Democratic People's Republic of Korea, we recognise that it is difficult to single out the Russian threat as deserving greater allocation of effort. It is therefore essential that the strategy is right – enabling smarter working and effective co-ordination. ”

“ In relation to the Agencies and Defence Intelligence, given the difficulties in working against Russia (explored in the next section) , it is particularly important that all sources – HUMINT, SIGINT, MASINT, GEOINT, [6] open source and others – are used to complement each other as much as possible, and that they are used across all aspects of the co-ordinated Russian threat (***) . Given the combined nature of the Russian threat, it is essential that the Agencies' and Defence Intelligence's work on *** is not viewed separately from wider Russian foreign policy and influence efforts. ”

“ QQ. In seeking political influence, there are obvious and repeated examples of Chinese attempts to interfere and stifle debate amongst the academic community in the UK. Universities are reliant on student fees, and the vast number of Chinese students in the UK—it is striking that there are more than five times the number than for any other country—provides China with significant leverage, which it is not afraid to exert. ”

“ BBB. China's joined-up approach can be clearly seen from its use of all possible legitimate routes to acquire UK technology, Intellectual Property and data—from buy‐in at the 'front end' via Academia, to actual buying-in through licensing agreements and Foreign Direct Investment, to the exertion of control over inward investments and standards-setting bodies. Each represents an individual threat, but it is the cumulative threat that can now be clearly seen. ”

“ The Government recognises that the increase in demand for intelligence to support the campaign against terrorism has meant that the Agencies, amongst others, have been obliged to review their priorities within their own budgets. This process has been carried out professionally and carefully, and the Government will continue to keep the situation under review. It is inevitable that if some areas of activity become relatively more important to the national interest, others become relatively less so and may have less resources devoted to them. ”