Nick Timothy is Director of the New Schools Network and a former Chief of Staff to Theresa May.
Last month, on the same day George Osborne announced his desire to “formally connect” the London and Shanghai stock exchanges – and give an even greater role for China in building British nuclear power stations – the Chinese received a rather different message from Britain’s principal ally across the Atlantic.
Shortly before President Obama hosted President Xi Jinping in the White House, Susan Rice, the American National Security Adviser, said that Chinese cyber-enabled espionage “isn’t a mild irritation, it’s an economic and national security concern to the United States.” Not mincing her words any further, Rice said Chinese hacking “that targets personal and corporate information for the economic gain of businesses undermines our long-term economic cooperation and it needs to stop.”
We should expect no such plain speaking from the British Government today, as President Xi begins his state visit to London. In place of candour, we will see official press releases and ministerial speeches promising new investments, business partnerships and a “golden decade” in Sino-British relations.
And, to be fair, there is gold in the relationship. British exports to China are growing – albeit from a low base – while according to the Centre for Economics and Business Research, China will have invested £105 billion in British infrastructure by 2025.
But what are the Chinese buying with their gold? The first thing on their shopping list is British silence on human rights abuses – and the Government has been only too happy to oblige. This summer, the British authorities tried to refuse a visa for Ai Wei Wei, the Chinese dissident now exhibiting his art in London. George Osborne’s visit to Urumqi, the capital of the troubled Xinjiang province, was criticised by Amnesty International for presenting a “major political coup” for China. And Chinese state media has been quick to praise the British Government for focusing “on business potential rather than raising a magnifying glass to the ‘human rights issue’”.
But human rights abuses are not the only concern about the British relationship with China. During Xi’s visit to London, the two governments will sign deals giving Chinese state-owned companies stakes in the British nuclear power stations planned for Hinkley Point in Somerset and Sizewell in Suffolk. It is believed that the deals could lead to the Chinese designing and constructing a third nuclear reactor at Bradwell in Essex. Security experts – reportedly inside as well as outside government – are worried that the Chinese could use their role to build weaknesses into computer systems which will allow them to shut down Britain’s energy production at will.
For those who believe that such an eventuality is unlikely, the Chinese National Nuclear Corporation – one of the state-owned companies involved in the plans for the British nuclear plants - says on its website that it is responsible not just for “increasing the value of state assets and developing the society” but the “building of national defence.” MI5 believes that “the intelligence services of…China…continue to work against UK interests at home and abroad.”
Mandiant, a US company that investigates computer security breaches around the world, looked into the operations of just one Chinese cyber espionage group, believed to be the Second Bureau of the People’s Liberation Army of China, or ‘Unit 61398’. Mandiant found that Unit 61398 has compromised 141 different companies in twenty major industries. There were 115 victims in the United States and five in the United Kingdom. The intellectual property stolen included technology blueprints, manufacturing processes, test results, business plans, pricing documents, partnership agreements, and emails and contact information.
Sir Iain Lobban, the former head of GCHQ, says there have been “attempts to steal British ideas and designs – in the IT, technology, defence, engineering and energy sectors, as well as other industries – to gain commercial advantage or to profit from secret knowledge of contractual arrangements.” Sir Jonathan Evans, the former head of MI5, has told the story of a “major London listed company” – believed to be Rio Tinto – that lost £800 million as a result of a “hostile state cyber attack” thought to have come from China.
Evidence like this makes it all the more baffling that the British Government has been so welcoming to Chinese state-owned companies in sensitive sectors. For it is not just in the energy sector that Britain has sought investment and partnership with China. Huawei, the Chinese telecommunications company, is banned from bidding for government contracts in the United States and Australia, yet the Government allows it to provide equipment and services that put it at the heart of Britain’s communications network. Two years ago, Britain’s policy towards Huawei led Parliament’s Intelligence and Security Committee to highlight “a number of weaknesses in the UK’s approach to deployment of equipment within [critical national infrastructure]” and to warn that “the Government’s duty to protect the safety and security of its citizens should not be compromised by fears of financial consequences.”
But that is exactly the compromise the Government is making: rational concerns about national security are being swept to one side because of the desperate desire for Chinese trade and investment. When, earlier this year, Britain became a founding member of the Chinese-controlled Asia Infrastructure Investment Bank, a US official told the press: “we are wary about a trend [in British policy] toward constant accommodation of China.” The official was right to be concerned: the AIIB is designed to undermine the World Bank and use other countries’ finances to fund investments that help to deliver China’s geopolitical aims.
And China has more than just finance in its armoury. Its defence budget is rising by at least ten per cent every year, and now stands at $141 billion. It is installing military equipment on man-made islands it has built in contested waters in the South China Sea. It plans to open a military base in Djibouti in the Horn of Africa. And its military is open about the need to project its power to protect “China’s national interests.”
Those interests now stretch around every continent of the world. There will be a lot of excited talk this week about the new ‘Silk Road‘ – an extensive transport network taking in thousands of miles of new roads, train lines and sea routes – and the opportunities for economic growth that it presents. But senior Chinese generals say that the Silk Road will have to include a “security component”, while even its name is a conscious reference to China’s imperial history: the Silk Road is yet another means of securing Chinese power.
The Government, however, seems intent on ignoring the evidence and presumably the advice of the security and intelligence agencies. But no amount of trade and investment should justify allowing a hostile state easy access to the country’s critical national infrastructure. Of course we should seek to trade with countries right across the world – but not when doing business comes at the expense of Britain’s own national security.