Page:ISC-China.pdf/181



As previously noted, boosting economic ties with China has been a clear priority for recent Governments, with the Coalition Government, Cameron Government and—to a lesser extent—the May Government all seeking Chinese investment in the UK. This desire is what has driven Government strategy in relation to the Civil Nuclear sector. In 2013 the National Security Council (NSC) decided that there was no bar to Chinese investment in the UK Civil Nuclear sector in principle (including, in time, majority ownership and the use of Chinese technology), provided all regulatory requirements were met.

Chinese investments in the sector have been underpinned by several strategic dialogues and agreements. During President Xi Jinping's state visit in 2015, a 'Statement of Cooperation in the field of Civil Nuclear Energy' was signed by the UK and China. This statement confirmed that the UK and China "welcome investment and participation in each other's nuclear new build programmes". It specifically welcomed the Hinkley Point C, Sizewell C and Bradwell B proposals, and noted that the successful approval of a Chinese reactor design for use in the UK would "mark the beginning of a genuine long-term strategic partnership".

The 2015 National Security Strategy stated the Government's wish to "[modernise] the UK's Energy infrastructure, including by attracting inward investors, with appropriate assessment of any national security risks, and mitigation" and adds that, "this approach has resulted in the recent investment by China into the new Hinkley Point C power station, supporting our longer-term Energy security".

The annual UK–China Economic and Financial Dialogue includes specific discussions on energy co-operation: the policy outcomes statement issued following the 2019 dialogue noted that "both sides attach importance to cooperation in the field of Civil Nuclear energy… [and] recognise the potential for further mutual beneficial commercial partnerships … [including in the] nuclear energy supply chain".

However, while the Government has previously emphasised that the UK is open for investment, the high-profile 2020 review of the 2016 Hinkley Point C decision, followed by the decision to ban Huawei from the 5G telecommunications network, mean that national security considerations have risen up the agenda. There have been reports that the Government considers China’s involvement in the UK Civil Nuclear sector (particularly in relation to Bradwell B) to be "politically unpalatable". It is also noteworthy that no specific reference to Chinese investment in UK nuclear energy was made in the Integrated Review.