# Intelligence and Security Committee China report

Intelligence and Security Committee of Parliament
China
Chairman: The Rt Hon. Sir Julian Lewis MP
HC 1605
Intelligence and Security Committee of Parliament
China
Chairman: The Rt Hon. Sir Julian Lewis MP
Presented to Parliament pursuant to sections 2 and 3 of the Justice and Security Act 2013
Ordered by the House of Commons to be printed on 13 July 2023
HC 1605
© Intelligence and Security Committee of Parliament copyright 2023
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ISBN 978-1-5286-4302
E0293894307/2023
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﻿THE INTELLIGENCE AND SECURITY COMMITTEE OF PARLIAMENT
The Rt Hon. Sir Julian Lewis MP (Chairman)
The Rt Hon. Maria Eagle MP (from 10 February 2022)
The Rt Hon. Sir John Hayes CBE MP
The Rt Hon. Stewart Hosie MP (until 14 December 2022)
The Rt Hon. Dame Diana Johnson DBE MP (until 14 January 2022)
The Rt Hon. Kevan Jones MP
Owen Thompson MP (from 7 February 2023)
The Rt Hon. Mark Pritchard MP (until 22 January 2022)
Colonel The Rt Hon. Bob Stewart DSO MP
The Rt Hon. Theresa Villiers MP
Admiral The Rt Hon. Lord West of Spithead GCB DSC PC
The Rt Hon. Sir Jeremy Wright KC MP (from 9 February 2022)
The Intelligence and Security Committee of Parliament (ISC) is a statutory committee of Parliament that has responsibility for oversight of the UK Intelligence Community. The Committee was originally established by the Intelligence Services Act 1994 and was reformed, and its powers reinforced, by the Justice and Security Act 2013.
The Committee oversees the intelligence and security activities of the Agencies, including the policies, expenditure, administration and operations of MI5 (the Security Service), MI6 (the Secret Intelligence Service or SIS) and GCHQ (the Government Communications Headquarters). The Committee also scrutinises the work of other parts of the Intelligence Community, including the Joint Intelligence Organisation (JIO) and the National Security Secretariat (NSS) in the Cabinet Office; Defence Intelligence (DI) in the Ministry of Defence; and Homeland Security Group in the Home Office.
The Committee consists of nine Members drawn from both Houses of Parliament. Members are appointed by the Houses of Parliament, having been nominated by the Prime Minister in consultation with the Leader of the Opposition. The Chair of the Committee is elected by its Members.
​The Members of the Committee are subject to section 1(1)(b) of the Official Secrets Act 1989 and are routinely given access to highly classified material in carrying out their duties. The Committee sets its own agenda and work programme, taking evidence from Government Ministers, the Heads of the intelligence and security Agencies, senior officials, experts and academics as required. Its Inquiries tend to concentrate on current events and issues of concern, and therefore focus on operational and policy matters, while its Annual Reports address administration and finance.
The Reports can contain highly classified material, which would damage the operational capabilities of the intelligence Agencies if it were published. There is therefore a well-established and lengthy process to prepare the Committee’s Reports ready for publication. The Report is checked to ensure that it is factually correct (i.e. that the facts and figures are up to date in what can be a fast-changing environment). The Intelligence Community may then, on behalf of the Prime Minister, request redaction of material in the Report if they consider that its publication would damage their work—for example, by revealing their targets, methods, sources or operational capabilities. The Committee requires the Intelligence Community to demonstrate clearly how publication of the material in question would be damaging, since the Committee aims to ensure that only the minimum of text is redacted from a Report. Where the Committee rejects a request for material to be redacted, if the organisation considers that the material would cause serious damage to national security if published, then the Head of that organisation must appear before the Committee to argue the case. Once these stages have been completed, the Report is sent to the Prime Minister to consider. Under the Justice and Security Act 2013, the Committee can only lay its Reports before Parliament once the Prime Minister has confirmed that there is no material in them which would prejudice the discharge of the functions of the Agencies or—where the Prime Minister considers that there is such material in the Report—once the Prime Minister has consulted the Committee and it has then excluded the relevant material from the Report.
The Committee believes that it is important that Parliament and the public should be able to see where information had to be redacted: redactions are clearly indicated in the Report by ***. This means that the published Report is the same as the classified version sent to the Prime Minister (albeit with redactions).
* ↑ This Inquiry was commenced by the previous Committee, which sat from November 2017 to November 2019, and was completed by the current Committee. The Report is a compilation of the work undertaken by both Committees.
* ↑ Throughout the Report, the term 'Intelligence Community' is used to refer to the seven organisations that the Committee oversees; the term 'Agencies' refers to MI5, SIS and GCHQ as a collective; and the term 'Departments' refers to the intelligence and security parts of the Ministry of Defence, Cabinet Office and the Home Office (DI, JIO, the National Security Adviser (NSA), NSS and Homeland Security Group (HSG)) as a collective, unless specified otherwise.
* ↑ From 1 April 2021, the Home Office moved to a new structure and the work of the Office for Security and Counter-Terrorism (OSCT) is now carried out by Homeland Security Group. Therefore, OSCT is now referred to as Homeland Security Group.
* ↑ The Committee oversees operations subject to the criteria set out in section 2 of the Justice and Security Act 2013.
* Overview................................................................................................................................................................................................................................................................................................................................................................................................1
* China's interest in the UK................................................................................................................................................................................................................................................................................................................................................................................................1
* The Inquiry................................................................................................................................................................................................................................................................................................................................................................................................1
* The 'whole-of-state' threat................................................................................................................................................................................................................................................................................................................................................................................................2
* Protecting the UK................................................................................................................................................................................................................................................................................................................................................................................................3
* PART ONE: THREAT AND RESPONSE................................................................................................................................................................................................................................................................................................................................................................................................7
* THE NATIONAL SECURITY THREAT TO THE UK................................................................................................................................................................................................................................................................................................................................................................................................9
* CHINA: AIMS AND AMBITIONS................................................................................................................................................................................................................................................................................................................................................................................................11
* What does China want from the UK?................................................................................................................................................................................................................................................................................................................................................................................................15
* WHAT IS CHINA SEEKING IN THE UK?................................................................................................................................................................................................................................................................................................................................................................................................19
* Political influence................................................................................................................................................................................................................................................................................................................................................................................................19
* Economic advantage................................................................................................................................................................................................................................................................................................................................................................................................21
* THE CHINESE INTELLIGENCE SERVICES................................................................................................................................................................................................................................................................................................................................................................................................25
* Scale................................................................................................................................................................................................................................................................................................................................................................................................25
* A broad remit................................................................................................................................................................................................................................................................................................................................................................................................28
* ‘Whole-of-state’ approach................................................................................................................................................................................................................................................................................................................................................................................................30
* ESPIONAGE................................................................................................................................................................................................................................................................................................................................................................................................31
* Gathering human intelligence................................................................................................................................................................................................................................................................................................................................................................................................31
* Cyber operations................................................................................................................................................................................................................................................................................................................................................................................................34
* INTERFERENCE................................................................................................................................................................................................................................................................................................................................................................................................37
* Government................................................................................................................................................................................................................................................................................................................................................................................................38
* Interference in elections................................................................................................................................................................................................................................................................................................................................................................................................42
* Media................................................................................................................................................................................................................................................................................................................................................................................................43
* The Chinese diaspora in the UK................................................................................................................................................................................................................................................................................................................................................................................................45
* HOW IS THE UK RESPONDING?................................................................................................................................................................................................................................................................................................................................................................................................49
* HMG'S BALANCING ACT................................................................................................................................................................................................................................................................................................................................................................................................51
* Conflicting priorities................................................................................................................................................................................................................................................................................................................................................................................................51
* A joined-up approach................................................................................................................................................................................................................................................................................................................................................................................................52
* THE 'STRATEGY': FRAMEWORKS, PLANS AND PILLARS................................................................................................................................................................................................................................................................................................................................................................................................55
* The China Senior Responsible Owner and National Strategy Implementation Group................................................................................................................................................................................................................................................................................................................................................................................................57
* The China Framework................................................................................................................................................................................................................................................................................................................................................................................................57
* The Intelligence Outcomes Prioritisation process................................................................................................................................................................................................................................................................................................................................................................................................63
* The tri-Agency approach................................................................................................................................................................................................................................................................................................................................................................................................64
* HMG Hostile State Activity Strategy................................................................................................................................................................................................................................................................................................................................................................................................65
* HMG RESOURCING................................................................................................................................................................................................................................................................................................................................................................................................69
* SIS................................................................................................................................................................................................................................................................................................................................................................................................69
* GCHQ................................................................................................................................................................................................................................................................................................................................................................................................70
* MI5................................................................................................................................................................................................................................................................................................................................................................................................70
* JIO................................................................................................................................................................................................................................................................................................................................................................................................70
* Other organisations................................................................................................................................................................................................................................................................................................................................................................................................71
* Potential for increase in resourcing................................................................................................................................................................................................................................................................................................................................................................................................72
* DEFENDING THE UK................................................................................................................................................................................................................................................................................................................................................................................................75
* Responsibility................................................................................................................................................................................................................................................................................................................................................................................................75
* Focus and coverage................................................................................................................................................................................................................................................................................................................................................................................................76
* Protective role: CPNI and NCSC................................................................................................................................................................................................................................................................................................................................................................................................77
* A new approach................................................................................................................................................................................................................................................................................................................................................................................................79
* Challenges in tackling Chinese spying................................................................................................................................................................................................................................................................................................................................................................................................79
* Challenges in countering Chinese interference operations................................................................................................................................................................................................................................................................................................................................................................................................81
* ON THE 'OFFENSIVE'................................................................................................................................................................................................................................................................................................................................................................................................85
* Allocation of effort................................................................................................................................................................................................................................................................................................................................................................................................85
* Requirements................................................................................................................................................................................................................................................................................................................................................................................................86
* Coverage................................................................................................................................................................................................................................................................................................................................................................................................87
* Effects................................................................................................................................................................................................................................................................................................................................................................................................87
* Are SIS and GCHQ 'achieving'?................................................................................................................................................................................................................................................................................................................................................................................................89
* SIS and GCHQ challenges in operating against China................................................................................................................................................................................................................................................................................................................................................................................................90
* WORKING WITH OUR ALLIES................................................................................................................................................................................................................................................................................................................................................................................................95
* Five Eyes................................................................................................................................................................................................................................................................................................................................................................................................95
* Other partners................................................................................................................................................................................................................................................................................................................................................................................................96
* LEGISLATION................................................................................................................................................................................................................................................................................................................................................................................................97
* The need for new legislation on Hostile State Activity................................................................................................................................................................................................................................................................................................................................................................................................97
* PART TWO: CASE STUDIES................................................................................................................................................................................................................................................................................................................................................................................................101
* CASE STUDY: ACADEMIA................................................................................................................................................................................................................................................................................................................................................................................................102
* CHINESE INTERFERENCE IN UK ACADEMIA................................................................................................................................................................................................................................................................................................................................................................................................103
* Influence and interference................................................................................................................................................................................................................................................................................................................................................................................................103
* Economic advantage................................................................................................................................................................................................................................................................................................................................................................................................109
* THE GOVERNMENT RESPONSE................................................................................................................................................................................................................................................................................................................................................................................................115
* Who: Taking responsibility for tackling influence and interference................................................................................................................................................................................................................................................................................................................................................................................................115
* How: Taking action on influence and interference................................................................................................................................................................................................................................................................................................................................................................................................116
* What: Understanding the threat from theft and subversion................................................................................................................................................................................................................................................................................................................................................................................................116
* How: Taking action on economic advantage................................................................................................................................................................................................................................................................................................................................................................................................117
* CASE STUDY: INDUSTRY AND TECHNOLOGY................................................................................................................................................................................................................................................................................................................................................................................................122
* CHINA'S APPROACH TO TECHNOLOGY................................................................................................................................................................................................................................................................................................................................................................................................123
* Why the UK?................................................................................................................................................................................................................................................................................................................................................................................................125
* What does China target in the UK?................................................................................................................................................................................................................................................................................................................................................................................................126
* METHODOLOGY: OVERT................................................................................................................................................................................................................................................................................................................................................................................................129
* Licensing agreements................................................................................................................................................................................................................................................................................................................................................................................................129
* Foreign Direct Investment................................................................................................................................................................................................................................................................................................................................................................................................129
* Inward investment into China................................................................................................................................................................................................................................................................................................................................................................................................131
* Standards-setting bodies................................................................................................................................................................................................................................................................................................................................................................................................132
* METHODOLOGY: COVERT................................................................................................................................................................................................................................................................................................................................................................................................135
* Human intelligence................................................................................................................................................................................................................................................................................................................................................................................................135
* Cyber................................................................................................................................................................................................................................................................................................................................................................................................137
* THE UK GOVERNMENT RESPONSE................................................................................................................................................................................................................................................................................................................................................................................................139
* Understanding the task................................................................................................................................................................................................................................................................................................................................................................................................139
* Foreign investment and national security................................................................................................................................................................................................................................................................................................................................................................................................141
* Disrupting activity................................................................................................................................................................................................................................................................................................................................................................................................147
* CASE STUDY: CIVIL NUCLEAR ENERGY ................................................................................................................................................................................................................................................................................................................................................................................................150
* CHINESE INTEREST AND INVESTMENTS................................................................................................................................................................................................................................................................................................................................................................................................151
* China's interest in the UK Civil Nuclear sector................................................................................................................................................................................................................................................................................................................................................................................................152
* Chinese investments................................................................................................................................................................................................................................................................................................................................................................................................153
* Linked investments................................................................................................................................................................................................................................................................................................................................................................................................155
* ESPIONAGE AND INFLUENCE................................................................................................................................................................................................................................................................................................................................................................................................159
* Espionage: Incentive and opportunity................................................................................................................................................................................................................................................................................................................................................................................................159
* Influence: Leverage and disruption................................................................................................................................................................................................................................................................................................................................................................................................163
* The position of the United States................................................................................................................................................................................................................................................................................................................................................................................................165
* THE GOVERNMENT RESPONSE................................................................................................................................................................................................................................................................................................................................................................................................171
* Cross-government scrutiny of foreign investment................................................................................................................................................................................................................................................................................................................................................................................................172
* Regulation................................................................................................................................................................................................................................................................................................................................................................................................174
* Intervention: The 'special share'................................................................................................................................................................................................................................................................................................................................................................................................175
* Advice to Industry................................................................................................................................................................................................................................................................................................................................................................................................177
* Wider UK Intelligence Community efforts................................................................................................................................................................................................................................................................................................................................................................................................180
* ANNEX A: COVID-19................................................................................................................................................................................................................................................................................................................................................................................................181
* Investigation of origin................................................................................................................................................................................................................................................................................................................................................................................................182
* China's initial response................................................................................................................................................................................................................................................................................................................................................................................................184
* Disinformation................................................................................................................................................................................................................................................................................................................................................................................................186
* Vaccine development and medical espionage................................................................................................................................................................................................................................................................................................................................................................................................187
* Debt leverage................................................................................................................................................................................................................................................................................................................................................................................................189
* Capitalising on the pandemic................................................................................................................................................................................................................................................................................................................................................................................................190
* Impact on the UK Intelligence Community................................................................................................................................................................................................................................................................................................................................................................................................190
* ANNEX B: FULL LIST OF CONCLUSIONS AND RECOMMENDATIONS................................................................................................................................................................................................................................................................................................................................................................................................193
* ANNEX C: CODE WORDS................................................................................................................................................................................................................................................................................................................................................................................................205
* ANNEX D: LIST OF WITNESSES................................................................................................................................................................................................................................................................................................................................................................................................207
* Officials................................................................................................................................................................................................................................................................................................................................................................................................207
* External Expert witnesses................................................................................................................................................................................................................................................................................................................................................................................................207
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