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CHINA Yet the security community were at least aware of many of the issues we address in this Report several years ago and we were therefore surprised at how long it had taken for a process to be put in place to identify and protect UK assets, based on the UK's sovereign interests ***. 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 global pandemic has brought into sharp relief the importance of the UK safeguarding its sovereign assets if we are to protect our domestic economic security.

As for who is in charge of countering Chinese interference, responsibility for mitigating the more overt aspects of the Chinese threat to the UK seems to rest with Whitehall policy departments. However, there is no evidence that those departments have the necessary resources, expertise or knowledge of the threat to investigate and counter China's approach. The nature of China's engagement, influence and interference activity in the UK is difficult to detect, but even more concerning is the fact that the Government may not previously have been looking for it. *** The UK is now playing catch-up—and the whole of the Government has its work cut out to understand and counter China’s 'whole-of-state' threat.

A further radical change in approach is required in relation to planning. Even now, HMG's focus has been dominated by short-term or acute threats. It has consistently failed to think long term—unlike China—and China has historically been able to take advantage of this. The Government must adopt a longer-term planning cycle with regards to the future security of the UK if it is to face Chinese ambitions, which are not reset every political cycle. This will mean adopting cross-government policies which may well take years to stand up, and require multi-year spending commitments. This is something that will likely require Opposition support—but the danger posed by doing too little too late in this area is too significant to play politics with. For a long-term strategy on China—thinking ten, fifteen, twenty years ahead—the Government needs to plan for it and commit to it now: the UK is severely handicapped by the short-termist approach currently being taken.

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. We know that China invests in political influence, and we question whether—with high-profile cases such as David Cameron (UK–China Fund), Sir Danny Alexander (Asian Infrastructure Investment Bank), Lord Heseltine (The 48 Group Club) and HMG's former Chief Information Officer, John Suffolk (Huawei)—a similar situation might be arising in relation to China.

At present, it appears that the threat from China is primarily at a state, rather than an individual, level and it can exert that state power in every area because of its economic might. The Government has, finally, put in place legislation (the National Security and Investment (NSI) Act 2021) to factor in security when considering investment decisions—eight years after this Committee warned them to do so. Whilst this is a positive development, there is still no effective independent oversight of decisions made under the NSI Act.