Spies, trade and tech: China’s relationship with Britain | World News - Hindustan Times
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Spies, trade and tech: China’s relationship with Britain

The Economist
May 23, 2024 08:00 AM IST

China was once seen as a golden opportunity. It is increasingly viewed as a threat

WHEN JOHN Le Carré joined MI5, Britain’s domestic security service, in the 1950s, long before finding fame as a spy novelist, his first job was not hunting the KGB. He was given the humdrum task of monitoring Commonwealth students in London. Chinese spies were thought to be using ethnically Chinese Singaporean and Malay students to gather industrial intelligence. It was not the most glamorous job. Le Carré was “dismayed”, recalls his biographer, to find that MI5’s China experts were “elderly retired missionaries with an imperfect command of the language”.

FILE- A pedestrian walks through a footbridge is silhouetted as Chinese and Hong Kong flags are strung to mark the 26th anniversary of the city's handover from Britain to China in Hong Kong, on June 27, 2023. Hong Kong’s plan to enact a new national security law, on top of a sweeping legislation that was imposed by Beijing and used to crack down on dissent, is deepening concerns over the erosion of freedoms in the former British colony.(AP Photo/Louise Delmotte, File)(AP) PREMIUM
FILE- A pedestrian walks through a footbridge is silhouetted as Chinese and Hong Kong flags are strung to mark the 26th anniversary of the city's handover from Britain to China in Hong Kong, on June 27, 2023. Hong Kong’s plan to enact a new national security law, on top of a sweeping legislation that was imposed by Beijing and used to crack down on dissent, is deepening concerns over the erosion of freedoms in the former British colony.(AP Photo/Louise Delmotte, File)(AP)

Today, China policy is no longer a backwater in the intelligence world. On May 13th police charged three men, including a former Royal Marine, with aiding the intelligence service of Hong Kong—in practice, controlled from Beijing—and conducting “foreign interference”. The men were charged under the National Security Act, a law passed in July 2023 in part to give British police the powers to investigate and tackle China’s covert activity. (China denies that Hong Kong’s intelligence service was involved.)

That law is one facet of a remarkable change in Britain’s view of China over the past decade—from a source of golden trade and investment opportunities to something much more malign. The relationship continues to raise complex questions over the balance between prosperity and national security, openness and protectionism. But the hawks are ascendant.

A foreign-policy review published last year warned that China posed “an epoch-defining challenge to the type of international order we want to see”. That assessment, as tough as any in Europe, has hardened as China’s supply of dual-use items has fuelled the Russian defence industry and so the war in Ukraine. There is still room for nuance—on May 8th Admiral Sir Tony Radakin, the chief of the defence staff, nodded to China’s “responsible role” in rebuking Russian nuclear threats in late 2022. But officials increasingly mention China in the same breath as Russia, Iran and North Korea. On May 14th Anne Keast-Butler, the director of GCHQ, Britain’s signals-intelligence agency, said that it now devoted more resources to China “than any other single mission”.

The charges on May 13th were an illustration of what British spooks see as a multipronged assault on the country’s security. One strand is espionage. In a report last year Parliament’s Intelligence and Security Committee noted that China had “the largest state intelligence apparatus in the world”, one “dwarfing” its British equivalents. In March the government publicly accused Chinese hackers of having targeted the country’s electoral commission and the emails of MPs critical of China. Those attacks suggested “a clear and persistent pattern of behaviour that signals hostile intent from China”, argued Oliver Dowden, the deputy prime minister. In April two men, including a former researcher in Parliament closely involved with the China Research Group, a club of China-sceptic MPs, were charged with spying for China under the rarely used Official Secrets Act. The Chinese embassy in London labels the charges as “malicious slander.”

All countries spy. What makes Chinese spying particularly egregious in the eyes of officials is not only its scale but also the damage it does to the British economy. In a speech in October, Ken McCallum, the director-general of MI5, said that 20,000 Britons—twice as many as two-and-a-half years earlier—had been approached by suspected Chinese agents on LinkedIn and other networking sites with the aim of extracting technology in areas like artificial intelligence, quantum computing and synthetic biology. He estimated that 10,000 businesses were at risk.

In April the government convened the heads of 24 top universities and security officials to discuss such things as transparency over sources of funding and vetting for researchers in sensitive areas. A report published by Civitas, a think-tank, last year found that 46 universities had accepted £122m-156m ($153m-196m) from Chinese sources between 2017 and the summer of 2023, of which around 16-20% came from entities sanctioned by America for their ties to the People’s Liberation Army.

A second strand is political meddling. Members of the Chinese diaspora have long complained of intimidation and coercion by Chinese agents, both physically and virtually. That is a particular concern for emigrants from Hong Kong: a draconian national-security law passed there in 2020 came into force in March. According to Amnesty International, a human-rights group, students involved in political or human-rights activism on campus frequently find that they are followed, harassed and subjected to threats against their families in China. “Every time, there is someone [we] don’t know filming,” noted one student. “Standing to the side, using their phones and recording. They don’t say anything but stand there holding their phone.”

The third strand is the question of Chinese technology. In 2019 and 2020 Britain was thrust into an acrimonious debate over whether Western countries should remove equipment made by Huawei, a tech giant, from their 5G mobile networks. American and Australian spooks said the tech posed a grave security risk; British ones insisted they could manage the problem through careful scrutiny of the kit. In the end Britain relented, in part because of American sanctions on Huawei. It has since banned Chinese-made surveillance cameras from “sensitive central-government sites”.

That has not settled the debate over the use of Chinese tech. Local-government authorities still have no obligation to remove such cameras. At least a third of police forces in England and Wales use surveillance cameras made by Hikvision, a Chinese firm blacklisted by America for its role in supporting mass repression in China’s Xinjiang province. A new row is brewing over the role of Chinese-made cellular Internet of Things modules, or CIMs, essentially small wireless components inside other devices—everything from cameras and smart meters to internet routers and vehicles—that, sceptics argue, could be exploited by China to steal data or disrupt critical national infrastructure.

In response to all this, the government has developed a battery of legal and regulatory instruments. One is the National Security Act, which gives the government new powers to prosecute people acting as agents of a foreign state. Another is the National Security and Investment Act passed in 2021, which allows scrutiny of inbound investment; over half its interventions in the first full year it was in force involved Chinese firms. Another still is the Higher Education (Freedom of Speech) Act, whose main provisions will come into force in August. It compels universities to protect free speech on campus and is likely to lead to limits on Chinese-funded institutes and scholarships in British universities, according to guidelines published by the Office for Students, a public body.

For China-sceptics, this still does not go far enough. One problem is implementing existing policies: BT, the country’s main telecoms operator, has missed two deadlines to strip out Huawei kit from the core part of its network. Another is that many key powers are devolved. The Higher Education Act, for instance, does not cover Scotland, Northern Ireland and Wales. “There’s a massive backdoor called Scotland,” complains Stewart McDonald, an MP for the Scottish National Party, “and nobody in Whitehall is giving this the thought it deserves.” Hawks also want China to be placed in an “enhanced tier” of countries under the National Security Act, which would impose stringent registration requirements on people or organisations acting “at the direction of” China.

Not all banks and businesses like the sound of that. China has become Britain’s fifth-largest trading partner (see chart); it is enmeshed in supply chains. Unpicking this relationship involves big trade-offs. A debate over the rising tide of Chinese electric-vehicle imports, for example, pits the benefits of cheaper cars and faster emissions cuts against fears of unfair competition and security vulnerabilities. The faultlines run through government. Jeremy Hunt, the chancellor, is thought to be wary of any decision which might involve economic pain, not least ahead of an election. Lord Cameron, who championed ties with China as prime minister between 2010 and 2016 and sought to establish a £1bn Britain-China investment fund after leaving office, is said to have converted to the China-sceptic camp as foreign secretary.

Where hawks and doves might agree is that Britain lacks the expertise to understand China. The number of students on Chinese-studies programmes dropped by 31% between 2012 and 2021, according to the Higher Education Statistics Association (it does not count those who take Mandarin as part of other degrees). In 2023 Whitehall pledged to double funding for China-related expertise in government, but Sam Hogg, author of “Beijing to Britain”, a newsletter, says that “there is very little financial incentive to become a China specialist and work your way through the system.” Many civil servants with China expertise, he says, are demoralised or have gone to the private sector. A poor foundation for what Mr McCallum has called “a strategic contest across decades”. 

For more expert analysis of the biggest stories in Britain, sign up to Blighty, our weekly subscriber-only newsletter.

© 2023, The Economist Newspaper Limited. All rights reserved. From The Economist, published under licence. The original content can be found on www.economist.com

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