The Intelligence and Security Committee of Parliament

“ 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. ”

“ 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. ”

“ 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. ”

“ 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. ”

“ 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 Chinese government has a strategic imperative to acquire technology that will enable it to improve and increase its domestic energy production. However, as it is likely that China will remain reliant on imports for much of its energy requirements in the medium term, it also needs to secure its energy supply overseas, including through the direct acquisition of energy assets (such as oil fields) . The Deputy National Security Adviser noted that China's principal concern was to " [ensure] it has got technology to sustain its own energy consumption". ”

“ 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. ”

“ At this point, however, we note that Academia provides China with a key means of exerting influence: Chinese attempts to interfere with, and stifle debate, amongst the academic community in the UK are a significant problem, made possible by China's academic 'buying power'. Chinese students make up the largest overseas (non-EU) contingent in UK universities [53] and are responsible for generating almost £600m—a very significant proportion of universities' income. China is actively using this income as leverage to gain political influence and control and to direct the narrative. ”

“ With disinformation reported so readily in the media throughout the Covid-19 pandemic, we asked the JIC Chair for his assessment of comparisons which could be drawn between Russian and Chinese efforts. The JIC Chair noted that disinformation campaigns by Russia and China seek to fulfil their respective political objectives: while Russia seeks actively to undermine trust in Western democratic institutions and values, China remains focused on controlling the narrative around its position in the world and its domestic challenges. ”

“ By contrast with the nuclear sector, there does not appear to be a threat from investment: the wider UK Energy sector is diverse and competitive, and therefore, while there is little information available on the scale of China's investments in the UK Energy sector, the size of the sector means that these will be proportionally less significant. Overall, there is no evidence that China's investments in UK Energy amount to a 'critical mass' of control over the sector that would cause concern. ”

“ PP. The UK's academic institutions provide a rich feeding ground for China to achieve political influence in the UK and economic advantage over the UK. China exerts influence over institutions, individual UK academics and Chinese students in order to control the narrative of debate about China—including through the use of Confucius Institutes in the UK—and it directs or steals UK academic research to obtain Intellectual Property in order to build, or short-cut to, Chinese expertise. However, the academic sector has not received sufficient advice on, or protection from, either. ”

“ 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. ”

“ 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. ”

“ The Chinese Ministry of Public Security (MPS) plays a key role in pursuing what China calls 'economic fugitives' (who are in fact more likely to be high-profile opposition figures) across the world, including in the UK. This global campaign to track down and repatriate individuals accused of corruption is known as Operation FOXHUNT. China is known to have repatriated Chinese nationals allegedly involved in corruption from the UK and conducted coerced repatriations of economic fugitives from the UK and kidnapping of dual nationals overseas. ”

“ Protecting the UK So what of the UK's response to this threat? As the world's second largest economy (and one of the fastest growing) , with a military increasing in size and capability, considerable levels of diplomatic engagement and a large digital sector which acts as a force multiplier, China has a significant impact on global affairs. The balance between security and prosperity requires dexterity and we understand that there are a number of difficult trade-offs involved. ”

“ The electricity network is made up of assets that generate, transmit and distribute electricity across the UK (for example generation stations, substations, cable tunnels, switching equipment and control rooms managing the network) . National Grid, SSE and Scottish Power are responsible for electricity transmission. There are considerable interdependencies between the electricity sector and other critical assets across other CNI sectors (such as telecommunications, finance and transport) , meaning that of the Energy sub-sectors, electricity is perhaps the most important. ”

“ Although this is concerning, we were told that the scale of the effort expended by China in the UK media is not "as vigorous" as that from Russia, and that targeting of social media, while engaged in extensively by China, is predominantly in Chinese languages rather than English. [36] As we noted when discussing the role of China in Academia, disinformation can be used as a means to shape the narrative on, or shut down discussion of, the domestic challenges that China considers as presenting the greatest risk to its international reputation or its internal suppression of dissent. ”

“ The Committee questioned whether there is any intelligence or intelligence assessment on the origins of the outbreak. What the Intelligence Community told us appeared to be not too dissimilar to the assessment made by the US Intelligence Community in 2020: that it is highly likely that SARS-CoV2 (the virus which causes Covid-19) is naturally occurring—as opposed to a laboratory-acquired infection or one manufactured as an offensive or defensive weapon, and it is likely that the first human infection originated from a natural human–animal interaction unconnected to a laboratory. ”

“ In its bid to become a global supplier, China is looking to capitalise on the UK's international leadership position: China sees UK regulatory approval as a valuable 'test bed' for proving Chinese technology for export to other Western markets. The Chief Operating Officer of China General Nuclear UK—the main Chinese investor in the Civil Nuclear sector—has said: "For us, the UK is an important stepping stone into Europe. ”

“ Part of the concern about the influence and control that Chinese investment in the UK Civil Nuclear sector might secure is around the threat of disruption. Disruption could mean temporarily shutting down a power network (at a localised or even national level) or causing irreparable damage to an energy-production facility, which could result in an energy shortage and/or a greater burden on alternative energy production. Depending on the means used to disrupt an energy-production facility, there could well be an impact on the local environment. ”

“ Unlike Russia, China is not assessed to be "fundamentally nihilistic" in its attempt to once again be viewed as a "great power" [4] —it does not appear to intend to carry out a catastrophic attack. China wants to be a technological and economic superpower, with other countries reliant on its goodwill—that is its primary measure of sovereign success. ”

“ In more ways than one, the broad remit of the ChIS poses a significant challenge to Western attempts to counter their activity.
'Whole-of-state' approach To compound the problem, there is not just the ChIS to consider. The UK Intelligence Community assess that: "The Chinese government is agnostic about the means employed to achieve its objectives. It is willing to pull on whichever lever is most likely to succeed, often employing multiple levers at the same time." ”

“ Notwithstanding the size of the Chinese population, the JIC Chair told us: "China will be seeking in some cases no doubt to coerce [the Chinese diaspora in the UK] , but certainly to encourage [it] to follow a line which is consistent with China's interests." [194] Family ties are often used as leverage in this context. With specific reference to academics, but in a broadly applicable observation, Charles Parton told the Committee: " [The CCP] can put real pressure on people who still have strong ties [to China] because they have relatives [there] , or may even return." ”

“ I think they do take us quite seriously, though not as seriously as once was the case, and I think they regard us as an economic opportunity and as an opportunity to, through elite capture, through the cultivation of useful idiots, through playing on things like the 'Golden Age' of British China relations, getting us by and large corralled into doing the sort of things they would like us to do. ”

“ There are public indications that, over the past decade, China has been placing greater emphasis on developing stronger foreign intelligence capabilities [76] —for example, the establishment of the People's Liberation Army Strategy Support Force (PLASSF) in 2015. SIS said that, while China "are predominantly focused on internal threats", nevertheless "they have a potent external capability ... they deploy globally". [77] It appears that President Xi's authority over the ChIS has grown since 2016, and that Beijing is using the ChIS as an increasingly important tool. ”

“ The origins of misinformation and disinformation are complicated and reflect the underlying purposes of their promulgators. Russian disinformation throughout the pandemic has been frequently alleged. When we speak of threats to the UK, we often talk of 'Russia and China' in the same breath. While each stands in opposition to Western liberal democratic values, the two present very different challenges and engage with the UK in very different ways. ”

“ In practice, this means that Chinese state-owned and non-state-owned companies, as well as academic and cultural establishments and ordinary Chinese citizens, are liable to be (willingly or unwillingly) co-opted into espionage and interference operations overseas. SIS told the Committee:
when you look at the kind of threat surface, it is very big and the people gathering information will not always be intelligence services. So every state institution in China is ultimately subsumed to the Chinese Communist Party and the state and their military interests. ”