China’s ‘breathtaking’ infiltration of UK economy: an existential threat?

China is engaged in a “whole-of-state” assault on the UK – and the Government’s response to this “onslaught” has been “completely inadequate”.

That is the devastating verdict of the long-awaited report of the cross-party Intelligence and Security Committee (ISC), which came out last week, said Ian Williams in The Spectator. Official reports tend to be dusty affairs, but with its warnings about Beijing’s successful penetration of “every sector of the economy”, this one reads in places more like a “terrifying thriller”, said The Independent. One section describes a “nightmare scenario” in which China “steals blueprints, sets standards and builds products, exerting political and economic influence at every step”. This, the report says, presents a “serious commercial challenge, but also has the potential to pose an existential threat to liberal democratic systems”.

‘Cheap goods with hidden price tag’

The scale of the infiltration is “breathtaking”, said The Times. The report warns that China has been “aggressively” targeting Britain’s industries, its energy sector, civil service and universities. Chinese research students, some connected to China’s armed forces, are “passing back sensitive research on a daily basis”, while universities turn a blind eye because of the vast sums the students bring in fees. More than 150,000 Chinese students are enrolled at UK universities; and 21 universities have links to what the Government calls “very high risk” Chinese institutions.

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Equally worrying is the level of Chinese investment in our vital supply chains, said The Daily Telegraph. The past year has shown that “cheap goods from autocratic regimes come with a considerable hidden price tag”. Just as Russia got Europe hooked on cheap gas before “turning the screws” as it invaded Ukraine, China may be fostering dependency as it eyes up a possible invasion of Taiwan.

‘No appetite for radical action’

Rishi Sunak’s “bland” response to the “excoriating” report of the ISC – whose members were given special security clearance to pursue their inquiries – suggests that he has no appetite for radical action, said The Independent. He has made it clear before that he thinks that disengaging with China would leave the economy badly exposed. Truth is, post-Brexit Britain “needs dynamic trading partners wherever it can find them”; and it can’t afford to fight a cold war on two fronts.

Yet other nations are also grappling with this dilemma, said the FT. Berlin doesn’t want to lose access to Chinese markets, but it is “de-risking” its ties by diversifying its supply chains away from the country; the US is tightly restricting trade and investment in specific technologies. Such strategies may point a way forward for the UK.