With permission, Madam Deputy Speaker, I will make a statement on the China audit.
China’s rise has shaped the geopolitical landscape. Over the past decade, their military expenditure doubled. Their armed forces became the world’s largest. They established dominance over most critical mineral supply chains. They pursued relentless innovation in electric vehicles, AI and even space travel.
And over this same period, China has delivered a third of global economic growth, becoming the world’s second largest economy. And, together with Hong Kong, the UK’s third largest trading partner.
Madam Deputy Speaker, not engaging with China is therefore no choice at all. Chinese power is an inescapable fact.
After what the Intelligence and Security Committee in 2023 described as a “completely inadequate” approach over the past decade to dealing with China’s “size, ambition and capability”, we must now look at the facts.
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Madam Deputy Speaker, this Government conducted an audit of our most complex bilateral relationship to deliver a long-term strategy – moving beyond cheap rhetoric to a data-driven, cross-government approach. I would like to thank the hundreds who contributed – Honourable Members of course, experts, businesses, diaspora communities, Devolved Governments, and close allies.
Madam Deputy Speaker, the audit is less a single act, than an ongoing exercise which will continue to guide the UK’s approach to China.
It informed the Government’s Strategic Defence Review, which assessed China was a “sophisticated and persistent challenge”. It informed the National Security Strategy, published today, which sets out China’s impacts on each strategic pillar of our UK national security. And it has steered our Trade and Industrial Strategies, which analysed where greater engagement is possible – given the important role China can play in delivering UK growth.
Madam Deputy Speaker, Honourable Members will understand that much of the audit was conducted at high classification, and most of the detail is not disclosable without damaging our national interests. I am therefore providing a broad summary of its recommendations today, in a manner consistent with that of our Five Eyes partners.
Madam Deputy Speaker, on security, the audit described a full spectrum of threats – from espionage and cyber-attacks, to the repression of Hong Kongers, and attacks on the rules-based order. It made clear that our protections must extend more widely than they currently do, from the security of this House, to our critical national infrastructure.
Honourable Members will again recognise that disclosing the detail of these responses would undermine their effectiveness.
But I can confirm that, following the audit, we are investing £600 million in our intelligence services. We are updating our state threats legislation, following Jon Hall’s review. We are strengthening our response to transnational repression, introducing training for police and launching more online guidance to support victims.
We are launching, as announced in the Industrial Strategy, a 12-week consultation on updating the definitions covering the 17 sensitive areas under the National Security and Investment Act. And we are working bilaterally with China to enhance intelligence flows related to illicit finance specifically, organised immigration crime and scam centres, using National Crime Agency capabilities.
Madam Deputy Speaker, on global security, the audit underlined the extent of Beijing’s support for the Kremlin. The Government has already tripled the number of Chinese entities sanctioned for equipping Russia’s illegal war. And we will continue to confront that.
The audit reiterated that our approach to China must stay rooted both in international law and deterrence. We will continue to confront China’s dangerous and destabilising activity in the South China Sea, which I saw for myself when I visited the Philippines.
And we will continue to work with our regional partners to support freedom of navigation and call out China’s abuses. We will double down on AUKUS.
We will not change our longstanding position on Taiwan, while sustaining unofficial but vibrant ties with Taiwan on trade, on education and innovation. We will also never shy away from shining a spotlight on human rights, notably the situations in Xinjiang and Tibet.
While on Hong Kong, we will insist that China honours its commitments under the Sino-British Joint Declaration, including by repealing the National Security Law and releasing Jimmy Lai.
Madam Deputy Speaker, the audit made clear that our approach will always be guided by the UK’s long-term economic growth priorities. It provided ample evidence of the extent to which our economies are intertwined.
China is our third biggest trading partner. Our universities’ second-largest source of international students. China will continue to play a vital role in supporting the UK’s secure growth.
But over the past decade, we have not had the structures, either to take the opportunities, or protect us from the risks which those deep links demand. Businesses told us time and again that they have lacked senior political engagement. Lacked adequate government guidance.
We have already begun to develop new structures. Regular Economic and Financial Dialogues, with my Right Honourable Friend the Chancellor setting us on course to unlock £1 billion of economic value for the UK economy, and positioning the UK’s world leading financial sector to reflect China’s importance to the global economy.
Joint Economic and Trade Commissions, and Joint Commission Meetings on science. We will also launch a new online hub bringing together detailed and specific business advice.
And the forthcoming Trade Strategy will set out how we will support British firms to enhance links with China’s vast and growing consumer market, as well as assess new tools to keep goods made by forced labour anywhere in the world off Britain’s high streets.
Madam Deputy Speaker, the audit recognised that China’s global role does not fit into simple stereotypes. China is the world’s biggest emitter, but also the biggest producer of renewables. It offers $80 billion towards development annually. And China is the UK’s second largest research collaborator – 11% of British research output included Chinese authors.
So, the audit was clear. The UK must develop new dialogues with China on issues like climate, development, global health and science, as well as on trade. In doing so, we are driving our long-term interests and creating secure opportunities for UK plc.
Madam Deputy Speaker, we cannot deal with China’s complexity, unless we improve our capability to understand it – for our national security and for secure trade and growth.
The audit showed that [political content redacted] there was a profound lack of confidence in how to deal with China, and a profound lack of knowledge regarding China’s culture, its history and – most importantly – its language.
Madam Deputy Speaker, over the past year I have found that far too few mandarins speak Mandarin. We are already taking action to address this. Introducing a new China Fast Stream in the FCDO. Creating an FCDO global China network. Training over 1000 civil servants on China policy in the past year.
Enhancing these capabilities still further will be a core focus for the £290 million FCDO Transformation Fund, announced in the National Security Strategy by my Honourable Friend a short time ago. The new strategy which proceeds from this audit will ensure that the Government examines the full spectrum of interests in its decision-making processes [political content redacted].
Madam Deputy Speaker, anyone expecting a simple prescription on China is not living in the real world. The audit has painted a complex picture, but it has provided us with a clear way forward.
The UK’s approach to China will be founded on progressive realism: taking the world as it is, not as we would wish it to be. Like our closest allies, we will cooperate where we can and we will challenge where we must.
Never compromising on our national security. Recognising the complexity of the world as it is. Engaging confidently, carefully and pragmatically. Delivering secure growth. These are the hallmarks of grown-up government, acting in the long-term national interest.
I commend this statement to the House.
