Reaction: China threatens UK trade as ex-spy’s dossier ‘sparks Huawei storm’

China’s ambassador has warned that Britain will “have to bear the consequences” if the government decides to ditch Huawei from the country’s 5G network.

The threat comes as Boris Johnson prepares to announce a ban on equipment supplied by the Chinese telecoms giant from next year as a result of US sanctions, according to The Times.

Meanwhile, in an “extraordinary twist” in the diplomatic row, a “controversial dossier accused China of trying to manipulate key establishment figures in the UK” in order to secure their backing for Huawei’s integration into the UK’s technology infrastructure, the Daily Mail reports.

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Titled “China’s Elite Capture”, the 86-page report was compiled with the help of ex-MI6 spy Christopher Steele, the author of the controversial “dirty dossier” about Russia and Donald Trump, and his company Orbis Business Intelligence.

The dossier - funded by US film producer and outspoken Huawei critic Andrew Duncan - describes the Chinese telecoms firm as “Beijing’s strategic asset” and cites fears that it could be used for state spying.

Steele and his co-authors reportedly claim that UK politicians and academics were among those targeted in the “covert campaign” to enlist “useful idiots”.

As tensions between Beijing and London continue to rise, ambassador Liu Xiaoming has “ramped up the pressure” on Johnson, telling the prime minister yesterday that “Chinese companies, which invested $8.3bn in Britain last year, were ‘all watching’”, The Times reports.

Liu added: “There’s also an element of trust - how could people trust you? I do hope the British government will make the decision in the best interests, not only in China’s interests, not only in the interests of UK-China co-operation, but also in the interests of the UK itself.”

The ambassador issued the warning as a number of the high-profile individuals named in the new dossier “denied being targeted or influenced in any way” by China, The Telegraph says. They included former Tory MP Sarah Wollaston, former chair of the Commons Liaison Committee, who told the newspaper that she had no knowledge of any covert PR campaign.

According to the Daily Mail, Lord-Lieutenant of Greater London Kenneth Olisa and former BT chair Mike Rake are also named in the report, along with the government’s former chief information officer John Suffolk, who is now Huawei’s head of global security. The Telegraph says they have all “strenuously denied” the claims.

Liberal Democrat peer Lord Clement-Jones, who sits on the international advisory board of the company, crops up in the dossier too. However, he told The Guardian that his “connection to the company is well known”, adding: “It’s all very baffling. It’s all a fantasy. We are not putty in the hand of manipulators.”

A Huawei spokesperson has also dismissed the claims, saying: “We categorically refute these unfounded allegations, which do not bear scrutiny and are regrettably the latest in the long-running US campaign against Huawei.”

Regardless of the various denials, the allegations made in the report are “likely to intensify the diplomatic row over Huawei, which presents a serious threat to Britain-China relations”, says the Daily Mail. Tensions have been heightened further by UK government’s offer of a route to citizenship for Hongkongers.

Johnson is reportedly reconsidering Huawei’s involvement in Britain’s 5G network following warnings from British security officials, as well as threats from at least 60 Conservative backbenchers to vote down any effort to use the Chinese firm’s tech.

Whitehall insiders told The Telegraph that work was now under way to find a “sensible middle ground” that would satisfy those backbenchers, who want all Huawei equipment scrapped by the end of this parliament.