China - Question for Short Debate

– in the House of Lords at 2:18 pm on 14th July 2022.

Alert me about debates like this

Photo of Lord West of Spithead Lord West of Spithead Labour 2:18 pm, 14th July 2022

To ask Her Majesty’s Government what steps they will take to respond to the long-term security challenges posed by China.

Photo of Lord West of Spithead Lord West of Spithead Labour

My Lords, the Chinese threat and the actions we need to take to counter it have been brought to prominence by two recent events. First, in June, the declaration agreed at the NATO Heads of Government summit in Madrid, referring to the specific threat posed by China and establishing a new strategic concept, said:

The People’s Republic of China’s … stated ambitions and coercive policies challenge our interests, security and values. The PRC employs a broad range of political, economic and military tools to increase its global footprint and project power, while remaining opaque about its strategy, intentions and military build-up. The PRC’s malicious hybrid and cyber operations and its confrontational rhetoric and disinformation target Allies and harm Alliance security. The PRC seeks to control key technological and industrial sectors, critical infrastructure, and strategic materials and supply chains.”

That is pretty damning stuff but a good reflection of Chinese behaviour over many years, despite Prime Minister Cameron’s good but somewhat naive push in 2015 to befriend China, encouraging trade and business investment with it.

The second event was the unprecedented MI5 and FBI joint address on the threat from China on 6 July this year. The FBI director said China presented an immense threat— indeed, the

“biggest long-term threat to our economic and national security”.

The director-general of MI5, Ken McCallum, said the most “game-changing challenge” came from the Chinese Communist Party. In particular, he referred to the surge in illegal procurement of

“tech, AI, advanced research or product development”.

He said that MI5 had

“doubled … previously-constrained effort against Chinese activity of concern” and is

“running seven times as many investigations” into Chinese threats compared to 2018. However, these two events just emphasise something we were already aware of. There have been numerous actions by China over several years that are of concern, and China has steadily become more assertive and dangerous. Let us list some of them.

As CDI in 2000 on a visit to China, I was instructed to give a warning to my opposite number that they should stop using cyber techniques to steal our intellectual property—which they were doing on a vast scale. Unsurprisingly, my interlocutor denied that it was happening, although, interestingly, later that day it stopped and did not start again until I left five days later. Since then, it has been done on an ever greater scale. There are about 40,000 Chinese working in the area of cyber to do things such as stealing IP; it is unbelievable.

Then there is the belt and road initiative, which is clearly aimed at gaining control of vulnerable countries—we mentioned Sri Lanka and its port, but this is happening all around the world—and opening up grand strategic options for the Chinese. There is also the deepening of the strategic partnership with Russia and attempts—there is no doubt they are trying to do this—to undercut the rules-based international order because it does not suit China. They are both attempting to do that.

There are actions that have led to democratic regression in south-east Asia. There have been threats of activity on the Indo-Chinese border and threats to maritime security in the Indo-Pacific region, including in the Korean peninsula, Taiwan, the East China Sea and the South China Sea. Noble Lords will be interested to know that I am not going to bang on about maritime issues and demand more ships.

Noble Lords:

Oh!

Photo of Lord West of Spithead Lord West of Spithead Labour

Mind you, we do need them—but that is a different issue.

We will move on to the erosion of China’s “one country, two systems” policy towards Hong Kong, which is extremely worrying. I note it has come to the attention of this House a number of times. There is the human rights abuse of the Uighur community in Xinjiang, which is a terrible situation. There are also broader security challenges related to climate change, including increased food and water insecurity, and—particularly in central Asia—forced migration and displacement.

It is hardly surprising that there was action, if somewhat late, over the involvement of Huawei in our 5G plans based on all these aspects and, more generally, concern over the takeover of UK-based technology firms by Chinese companies. Of course, the Chinese also have huge involvement in our nuclear programme. There are concerns about Hikvision; I said that I was very surprised that we were going to establish it on the Parliamentary Estate. From cameras such as those you can get amazing intelligence, which I know from my intelligence background.

This is all symptomatic of our conflicted relationship with China. We have still not resolved how we wish to deal with it and we need to do so quickly. Xi Jinping has articulated very clearly that he has a very clear agenda for China to become the most powerful nation on earth, setting its own rules for global behaviour. What is clear is that the integrated review provided no guidance on balancing ambition for increased economic engagement with China with the need to protect the UK’s wider interests and values.

The Lords International Relations and Defence Committee recommended that the Government publish a strategy on China. May I ask the Minister whether now, in view of the NATO conference, warnings and all these other things, such a document will be produced? There is no doubt that clarity is required, as uncertainty is damaging to businesses and detrimental to our partnerships and alliances in the region.

On the subject of agreements and alliances, I welcomed the recent AUKUS agreement, which gave China a clear message of intent. I have to say that there are some huge question marks over the cost of a nuclear submarine programme for Australia, but I will put that to one side.

The UK is already part of the Five Power Defence Arrangements between Australia, Malaysia, New Zealand and Singapore. That is something we have in the Far East, where no other European has something similar. We have also recently joined the Partners in the Blue Pacific with Australia, Japan and New Zealand.

China’s behaviour needs to be confronted, not least its establishment of a base on a South Pacific island, for instance. Why would it do that? No wonder the Australians are concerned. The Indo-Pacific Quad is a significant new alliance. Is there any intention for the UK to join the Quad?

My concern is that although we are beginning to understand more completely the threat presented by China, we are constrained because of its economic importance. China is not an immediate real and present danger like Russia, whose dreadful actions present a real possibility of world war by miscalculation in the near term. As an aside, wars tend to happen in August, as do international crises, and I am pretty worried that we do not have a proper Government at this stage. In the long term, however, China is far more dangerous. Unlike most, I do not think the current war in Europe means that the Chinese will invade Taiwan barring some very dramatic change. I have spoken to Chinese leaders over the years, and know that they have seen the outcome of wars as far too unpredictable. Putin told Xi Jinping that his attack on Ukraine would not be unpredictable, and it has proved very clearly that the Chinese are right in their assessment that wars are unpredictable. However, they believe time is on their side and world hegemony assured. They have been building up large armed forces, and they will be willing to use them unless confronted by proper alliances. It is crucial, I believe, that we have a clear road map of how we counter this Chinese ambition.

Photo of Lord Howell of Guildford Lord Howell of Guildford Conservative 2:27 pm, 14th July 2022

My Lords, I congratulate the noble Lord, Lord West, on bringing us this short debate on an enormous subject. He really is one of the few experts in this field who understands the new realities. I am afraid it is rather few as well; we need more debate and more understanding.

I will make two quick points in the limited time. First, we should be far more aware of Chinese encroachment on Commonwealth member states—and others of course, but particularly Commonwealth member states—in the global south, Africa, the coastal states and the Caribbean. In the South Seas, their wish to have a naval base in the Solomons Islands is just the latest example. This involvement is not just commercial—unrepayable loans, infrastructure and so on—it is becoming military as well, with officer training and weapons training. This has security implications for this country.

Secondly, China now controls port facilities in 53 countries round the world, and has belt and road initiative memorandums of understanding with 141 countries, including 38 Commonwealth members. As part of its desire for hegemonic control of Asia, and getting the Americans, whom they loathe, out, it is eyeing the Taiwan takeover opportunity and assessing whether Ukraine is an encouragement or a reason for delay—fascinating scenes. There is also, as the noble Lord reminded us, the Chinese hacking activity. Military intelligence people now tell us that it exceeds those of all other countries combined. This is a part of the invisible war. The war in Ukraine is very visible and very primitive. Maybe it is the last of its kind—who knows? Meanwhile, quiet, invisible wars are taking place and beginning to undermine our structure and our desire to reposition ourselves in an entirely changed world.

I am not Sinophobic, but we are heading for major foreign policy failure if we ignore these developments and allow the Commonwealth network—a worldwide alliance of like-minded countries—to crumble away and align itself with autocracies and those who flout international law.

Photo of Lord Alton of Liverpool Lord Alton of Liverpool Crossbench 2:30 pm, 14th July 2022

My Lords, I refer the House to my relevant non-financial interests.

If we look through the lens of Tibet, Taiwan, Hong Kong, Wuhan or Xinjiang or through the lens of Xi Jinping’s support for Putin in Ukraine, we see that the security threat posed by the CCP is both stark and self-evident. Let us consider, as the noble Lord, Lord West of Spithead, has invited us to do, the stark and unprecedented public warning from the director of MI5 and the FBI director last week, which stated that the Chinese Communist Party is

“covertly applying pressure across the globe”,

including through “covert theft”, “technology transfers” and “interference” in our political systems. Such interference was illustrated by the case of Christine Lee, the Chinese spy, who sought to influence Members of this very Parliament, boasting that she had even secured amendments to a Bill before this House. It is just the subversive tip of an iceberg.

Too many among the political and business elites have naively considered the CCP and Chinese state-owned enterprises as benign, welcoming unprecedented levels of Chinese investment into strategic sectors of our economy and research partnerships with institutions linked to the People’s Liberation Army, and even considering a free trade agreement between the UK and China. This week alone, Treasury officials were reported to be scrambling to ensure the restart of the UK-China Economic and Financial Dialogue, despite Parliament and the Foreign Secretary stating that China’s treatment of the Uighurs is “genocide”.

Take public procurement. In a variety of sectors, we are far too dependent on Chinese companies, from NHS PPE to surveillance technology cameras in numerous government departments. The Cabinet Office told me that there are more than 1 million Hikvision cameras, referred to by the noble Lord, in the United Kingdom. This is a Chinese company that the Government openly admit is a security risk, that receives nearly half its funding from the state and that has been blacklisted in the USA—our Five Eyes ally—for its active complicity in gross human rights violations in Xinjiang.

Then there are long-term security concerns regarding Chinese takeovers of strategic UK industries, from the attempted takeover of the UK’s biggest manufacturer of semi-conductors, Newport Wafer Fab, to that of the graphene maker Perpetuus. We must strengthen resilience, protect cutting-edge technology and safeguard our research facilities. Universities must get off the gravy train and be more vigilant about their partnerships and theft of sensitive academic research. It is indefensible—even worse, a betrayal of our national interests—for UK universities to be working with, and providing sensitive research on, hypersonic missiles to companies and research institutions linked to the People’s Liberation Army.

We are all grateful to the noble Lord. I hope that the International Relations and Defence Select Committee report to which he referred will be the subject of a debate in your Lordships’ House soon.

Photo of The Bishop of St Albans The Bishop of St Albans Bishop 2:32 pm, 14th July 2022

My Lords, I have spoken on numerous occasions about the ongoing tragedy in Xinjiang province. I have also spoken on various occasions about the worrying issues of surveillance and hacking of businesses and individuals in this country. It is very helpful to hear other noble Lords picking up on some of them. However, in the very limited time I have, I want to make a few comments building on some of those made by the noble Lord, Lord Howell of Guildford, about China’s relationship with the Commonwealth. In particular, I want to focus on the soft power which maintains strong international bonds, bolsters our influence in the world and commends our western culture, rooted in an understanding which draws on Christian tradition.

Last year, Barbados decided to end its ties with the monarchy. The chair of the UK Foreign Affairs Select Committee noted:

“China has been using infrastructure investment and debt diplomacy as a means of control”— he was referring to Barbados. In April this year, the Solomon Islands signed a security pact that could pave the way for a Chinese naval base there. China is also increasing its investment in Papua New Guinea with the recent $30 million purchase of a special economic zone. These events are happening at a time when we have cut our international aid—our practical involvement with many countries in great need of support. Surely this is the very time when we need to increase our involvement in the wider world and in the Commonwealth, to nurture strong relationships, not least through increasing the number of students and looking at trade. That helps those countries which, if we do not work with them, will look elsewhere, and China is all too ready to respond to the opportunities. This is particularly true and important in the South Pacific, where the ability to project naval dominance holds the key to curbing China’s ambitions in relation to Taiwan and the South China Sea. I therefore ask the Minister: what is the UK, alongside its allies the USA, Australia and New Zealand, actively doing to counter Chinese influence in these nations?

Photo of Baroness Meyer Baroness Meyer Conservative 2:35 pm, 14th July 2022

My Lords, we are still waiting for the Government’s strategy for managing relations with China. I know that it is complicated because China is, at the same time, a partner, a competitor and an adversary. It invests in our airports, microchip companies and universities, but it challenges our values at every turn.

Earlier this month, the heads of MI5 and the FBI said that China was an “immense” threat. It is not hard to see why: China seeks to replace the US as the dominant superpower, it has suppressed democracy in Hong Kong and it supports the Russian invasion of Ukraine. A key reason for maintaining Western solidarity in the face of Russian aggression is to make Ukraine a deterrent to, not an incentive for, any Chinese attack on Taiwan.

We have allowed China to worm its way into the inner workings of British life. We have all heard of Huawei’s grip on the manufacture of equipment for UK communications companies. Something similar has happened with our surveillance cameras: as we have heard earlier, there are approximately six million CCTV cameras in the UK and most of these are supplied by Chinese companies to public bodies. I do not have to spell out the dangers, but we can do something about it. Last year, the US Government banned federal agencies from installing equipment supplied by Hikvision and other Chinese companies. I therefore welcome the recent banning of Hikvision from competing for new business in the Department of Health and Social Care. Can my noble friend the Minister reassure this House that this is part of a coherent strategy across the Government and not just a piecemeal reaction to the concerns of that department?

Photo of Lord Anderson of Swansea Lord Anderson of Swansea Labour 2:38 pm, 14th July 2022

I congratulate my noble friend on his prescience because there have been two unprecedented events recently, one of which was the reference to the threat from China in the NATO strategic concept set out in Madrid and the other was the similarly unprecedented appeal by the FBI and our own MI5. This puts us on guard. There has been a certain naivety in our attitude to China in the past—I think of George Osborne’s view of China’s “golden era” in 2015. Since that time when agreements were made, there have been the threats and takeover in Hong Kong, the situation with the Uighurs, which has already been mentioned, and the general threats of Chinese malign activity that have been revealed. Surely a wake-up process is now under way.

This sadly comes at a time when much of our attention has been focused on the attack on Ukraine. We hope that President Xi will perhaps see the robust response in terms of sanctions and feed that into his own calculations on Taiwan.

That said, we must recognise that there is a certain professional deformation in the response of our securocrats in the FBI and MI5. There is a much broader canvas in terms of China; this was recognised in the integrated review, of which I commend page 26 to your Lordships. The IRDC report, which my noble friend referred to, called for a “coherent strategy” regarding China.

In terms of understanding China, I think, for example, of our response in the early 1960s to Russia, when we had the Hayter report on an increased focus in our universities. Of course, it is not only in terms of industry, but also in our universities, where we must look at the China question. We know, for example, that there are now 144,000 Chinese students in the UK—a 50% increase in five years—and they are studying applied science, not chorus endings from Euripides. In short, yes, we need vigilance, but we also need balance and a better understanding of the middle kingdom—China. President Johnson once said of another relationship, “Keep your hand out, but your guard up”. I know this is a difficult posture, but I would commend it to your Lordships.

Photo of Viscount Waverley Viscount Waverley Crossbench 2:41 pm, 14th July 2022

My Lords, today takes us back to the report last September, The UK and China’s security and trade relationship: A strategic void. It says it all: a singular lack of understanding of China, its mentality and future plans.

Indicators point, I fear, to China triggering an invasion of Taiwan to assert its one-China policy. This presents two conundrums: first, Taiwan having been delisted as a UN nation state in 1979 and, secondly, liberal democracies believing that steps to strengthen relations with Taiwan would instigate retaliatory measures from Beijing. The ripple effects that would extend across the region, however, should not be underestimated, with China having to spend years pacifying Taiwan, both militarily and politically. China must believe that sanctions represent deterrence and an existential economic threat by Western countries curtailing trade while being challenged in parallel to protect vital logistical supply routes before China ends dollar-based transactions.

The US maintains a position of strategic ambiguity. It pursues a deterrence and reassurance strategy and deliberates on how to reduce the possibility of war by exploring conflict contingency plans, notwithstanding the Taiwan Relations Act, by which the US provides Taiwan with defensive capabilities. It juggles that by leading in the applying of economic, political and cultural sanctions, with the retaliatory freezing of Chinese assets, confiscation of Chinese-origin organisations and decoupling of information technology companies.

Sanctions are not the only deterrent, however. Any invasion would hinge on intricate military and logistical planning, requiring an amphibious assault across the large sea gap to reach Taiwan. It is fortified by heavily forested mountain ridges running the length of the island and is, crucially, mostly urban, which would present China’s forces with significant losses. China would likely resort to activating kinetic strikes using long range hypersonic ballistic weaponry with the spectre of threatening to go nuclear or, at the very least, escalating cyberspace activity and targeting a range of critical Western infrastructure by secretly deploying Trojan horse missiles in shipping containers positioned in Western ports.

Concluding on a less gloomy note however, a window still exists to pour oil on troubled waters, but Western policymakers and diplomats need to up the game and face the gravity of the situation with a supercharged, innovative carrot-and-stick strategy. I have just one question, which follows the initial remarks of the noble Lord, Lord West. The other day, I asked for comment on the background to NATO leaders agreeing to a

“strategic concept, which addresses China and its systematic challenges to collective security”—[Official Report, 7/7/22; col. 1151.] at the recent NATO summit. Was the statement designed to be ambiguous?

Photo of Lord Desai Lord Desai Non-affiliated 2:44 pm, 14th July 2022

My Lords, the Chinese have a long memory. We have to cultivate the same sort of long memory; that will be one very important weapon if we are going to fight the Chinese. First, they all remember the opium wars, because before that China was practically the number one country in the world, and they want to get back to that time.

I think we occasionally have to do a sort of role-playing. Suppose I was China—how would I feel about Taiwan? Why would I accept that Taiwan is an independent country of any sort, and why should anybody think that it does not belong to China? I see no reason for that view if we look at it from the British point of view of its being a British province or island, and another country is pretending that it belongs to it. I am saying all this because we have to remember that the Chinese do think differently, and they are not going to go away.

Secondly, look at the contrast between the Soviet Union, which tried to establish a powerful league of friendly nations, and China. China has obviously thought about all the Soviet Union’s defects very carefully and built its camp not on ideology or preaching Marxism but on giving money to other countries and getting them into debt with China—originally on very friendly terms but ultimately, it is quite ruthless at capturing those debts.

Thirdly, China has not rejected capitalism like the Soviet Union did. It has not only adopted capitalism but invested massively in cybertechnology, artificial intelligence and all the new directions of science. We should take China seriously, and I advise Her Majesty’s Government to carry out this role-playing exercise, which will tell us how the Chinese are likely to think about the challenges we pose to them.

I end with this. France was our enemy between, let us say, 1750 and 1850, and later on became a friend, while Germany became our enemy. The same situation exists between us and Russia and us and China: Russia will very soon stop being effective, and China will continue to be the enemy.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour 2:47 pm, 14th July 2022

My Lords, we should all be grateful to my noble friend Lord West for initiating this long-overdue debate. As he said, the directors of MI5 and the FBI pointed out in that unprecedented speech that our traditional defence architecture is no longer suitable for dealing with the major threats from China, because although it is developing its weapons, its major threats are hacking, as has already been said, and economic coercion.

On the hacking front, it is vital that we continue to invest heavily in cybersecurity. As others have said, we must make sure that any Chinese investment in our technology sector undergoes thorough scrutiny, and, wherever possible, reliance on Chinese technology in essential industries should be kept to an absolute minimum—if not kept out altogether.

The war in Ukraine has highlighted the dangers of any form of dependence on authoritarian regimes, so we should be concerned that in 2021 we ran a total trade deficit with China which amounted to just over £30 billion, making China our third largest trading partner. As has already been mentioned, while much of the recent debate around dodgy London property owners has understandably focused on Russian oligarchs, China continues to quietly buy up the city. Over 200,000 London-based properties are owned by Chinese buyers. As the noble Baroness, Lady Meyer, rightly said, we sometimes forget that Chinese investors own British football clubs, airports, landmarks such as the Cheesegrater and, even more worryingly, strategically important infrastructure in our oil, gas, water and nuclear industries.

One of the many unfortunate consequences of Brexit is that we are now in a less favourable position when it comes to picking trading partners. But if you compare UK regulations to the strict FDI laws that operate in China, we should be tightening our restrictions on Chinese investment, even in non-strategic industries, as China could use this as leverage in areas such as climate change.

As my noble friend Lord West said, a new approach to UK-China relations is long overdue. When was the last one? The last clearly defined strategy paper was published by Labour in 2009; that shows how long overdue this is. One point I want to raise is that we need more British people, such as graduates, speaking Chinese and understanding China and its civilisation a lot better. This begins in the classroom with the promotion of Mandarin and lessons about Chinese civilisation and other similar subjects. I hope that the Minister will agree to tighten regulation of Chinese investment in this country, and that he will support a nationwide attempt to build a China-literate and China-aware workforce through increased education programmes at school level and across all government departments.

Photo of Lord Rogan Lord Rogan Deputy Chairman of Committees, Deputy Speaker (Lords) 2:50 pm, 14th July 2022

My Lords, I too congratulate the noble Lord, Lord West, on securing this timely debate, in which I declare an interest as the proud co-chair of the British-Taiwanese All-Party Parliamentary Group.

Taiwan is a country that I have visited many times since 1972. I have always been impressed by the kindness, generosity and dignity of its people. However, it is a land that feels under constant siege because of the aggressive words and actions of China. Beijing has increased the number and scale of patrols of bombers, fighter jets and surveillance aircraft in Taiwanese airspace and close to Taiwan itself. It has sailed its warships and aircraft carriers through the Taiwan Strait in shows of force. As the noble Viscount, Lord Waverley, alluded to, it has also launched thousands of cyberattacks against Taiwanese government agencies, with new assaults coming every day. The authoritarian Chinese regime hates the freedoms enjoyed by the people of Taiwan. By his aggressive actions, Xi Jinping believes that he can wear down the population and lead them to conclude that unification with China is in their best interests. I must tell your Lordships that he is very much mistaken.

I regard it as shameful that the United Kingdom does not recognise Taiwan as a state and has no diplomatic relations with the country. We must ask why. Is it because successive UK Governments have chosen to placate the dictators in Beijing rather than stand up to them? However, despite this, China has continued to sabre-rattle and issue thinly veiled threats to attack Taiwan. Only last Thursday, a Chinese official told a government-controlled newspaper that “reunification” of the two countries was approaching.

His comments were made 24 hours before the assassination of the former Japanese Prime Minister, one of the most ardent opponents of Chinese militarisation in the Pacific and a great friend to the people of Taiwan. Shinzo Abe’s funeral was held on Tuesday but, rather than express condolences on his passing, Beijing lodged “stern representations” with the Japanese Government in protest at the attendance of Taiwan’s vice-president, William Lai. A Chinese foreign ministry spokesman claimed that Taiwan is a part of China and

“does not have a so-called vice-president.”

Shinzo Abe’s stance on the security threat posed by China was both admirable and correct. As the contest to choose a new UK Prime Minister continues, I hope that the victorious candidate, whoever he or she may be, chooses to follow the strong lead on China of Shinzo Abe rather than the somewhat weaker position adopted by recent occupants of Downing Street.

Photo of Lord Cormack Lord Cormack Conservative 2:53 pm, 14th July 2022

My Lords, we are all very much in the debt of the noble Lord, Lord West, but this must be a prelude to a proper debate on one of the most important subjects before the world. I urge my noble friend the Deputy Chief Whip, who is sitting on the Front Bench, to take this message from this debate: we must have a full debate on China very soon. Indeed, with all the expertise in your Lordships’ House, we need more foreign affairs debates.

It is often said that democracies think in terms of the next election, despotisms in decades. The real problem here, as was referred to by the noble Lord, Lord Foulkes, is that we do not have a strategy. We must decide whether we wish to continue to be a world power. If we do, those who wish the ends must wish the means. This issue needs to be at the very top of the new Prime Minister’s agenda, whenever he or she takes office, which I hope is in the next week or so: do we wish to be a world power?

The noble Lord, Lord Anderson, referred to how we are cross-party. The noble Lord, Lord Collins, referred earlier to how the Opposition totally support us on Ukraine. We need a national council, consisting not only of the Prime Minister and inner members of the Cabinet but of the leader of the Opposition and others from the other side of the House, so that we can plan a strategy together that we know will be supported by both. There is no point in thinking merely in terms of the next election; we too have to think in terms of decades.

The Chinese have been doing that, with their belt and road policy, by taking an option on a port in the Solomon Islands and by taking over Piraeus in Greece. We need an effective answer, spearheaded by the Government and supported by the Opposition, and we need to discuss it fully in your Lordships’ House.

Photo of Lord Liddle Lord Liddle Labour 2:56 pm, 14th July 2022

My Lords, I commend my noble friend Lord West on procuring this debate and I wholly agree with what the noble Lord, Lord Cormack, just said about the need for a much deeper discussion of these issues. My own two-pennorth is a plea for a little nuance in this discussion of China. Yes, it is an autocracy and does terrible things. Yes, it is investing massively in military force and, yes, we have to be wary of its technological ambitions. But we should not lump it together with Russia. It is not like Russia.

In my view, the legitimacy of the Chinese regime fundamentally depends on its continued success in raising living standards at home, and that depends on its continued engagement with the world economy. The West should continue to engage with the Chinese to manage globalisation better. For example, without Chinese involvement we will make no fundamental progress on the crucial question of climate change.

I do not want to see an attempt to isolate China in order, as it were, to start a new Cold War. I do not agree with that. When I was chair of Lancaster University, I supported investments in Chinese campuses and promoted, along with my council and the noble Baroness, Lady Neville-Jones, a lot of Chinese students coming to our university.

The second point of nuance that I would like to make is that we have to be realistic about our defence commitments as a country. I am a strong supporter of an increase in the defence budget, but I remember the Labour Government having the debate, back in the 1960s, about withdrawing east of Suez. Do you know how much we were spending on defence in 1968? We were spending 5.9% of our GDP to maintain that global defence role. I ask Members of this House whether, in our present reduced economic state, we really think Britain is in a position to go back to that level of global defence commitment. We have to be very careful about what commitments we make.

Photo of Lord Collins of Highbury Lord Collins of Highbury Opposition Whip (Lords), Shadow Spokesperson (Foreign and Commonwealth Affairs and International Development), Shadow Deputy Leader of the House of Lords 3:00 pm, 14th July 2022

My Lords, I, too, thank my noble friend for initiating this short but vital debate. Increased aggressive rhetoric combined with human rights abuses in Hong Kong and Xinjiang illustrate the long-term security challenges which the Government of China pose. It is now clear that President Xi is intent on controlling Taiwan in some form, even if he is reluctant to go to war like Putin has in Ukraine. Our relationship with China must therefore centre on pragmatism and be alert to the security risks which it poses.

I was very pleased to read the report by the International Relations and Defence Committee, published last year, which laid out the clear case for a consistent written strategy setting out the Government’s security relationship with China. As long as Ministers maintain their policy of ambiguity, we cannot be confident that they are properly balancing the need for economic engagement with the importance of the UK’s interests and values. Unfortunately, the response to the report gave no further indication of a wide-ranging strategy—far from it. Instead, there were only piecemeal points about the UK’s interests and values. It focused on things such as it being important to avoid strategic dependency on China.

The Government argued that the National Security Council provided a clear direction for the their China policy and that it was supported by the work of the integrated review. I have no criticisms of the direction of the pathway of the integrated review, although we have some issues in terms of the tilt in the light of Russian aggression. I agree with the noble Baroness, Lady Anelay, who wrote a follow-up letter in which she said that the ambiguity and uncertainty was

“damaging to businesses and detrimental to our partnerships and alliances in the region”.

In particular she wrote that it was unclear how the Government intended to balance human rights issues with its economic relationship with China, and

“how it will prioritise when these considerations clash.”

In response to the noble Baroness, Lady Anelay, Amanda Milling said:

“We will uphold our values and protect our national security while promoting a positive and reliable trading relationship.”

Can the Minister tell us exactly what is the extensive programme of engagement with UK businesses to ensure that the UK’s policy is fully understood? I think most noble Lords want to hear from the Minister some concrete examples.

Photo of Lord Sharpe of Epsom Lord Sharpe of Epsom Lord in Waiting (HM Household) (Whip) 3:03 pm, 14th July 2022

My Lords, I join other noble Lords in thanking the noble Lord, Lord West of Spithead, for tabling this debate, and I thank all noble Lords for their insightful contributions.

Before I respond to the points raised during this debate, I have to declare an interest. I lived in Hong Kong for the best part of a decade and I am a former member of the APPG on Hong Kong. I should also say at the outset that, when I refer to China in this debate, I am referring specifically to the Chinese authorities and not to the Chinese people. The noble Lord, Lord Liddle, made a similar point in his remarks.

My noble friend Lord Howell made the fair point that this is an enormous subject. He is obviously quite right. It will be difficult to do justice to all the contributions in the short time I am allowed, but I will study Hansard and if I miss anything I commit to write.

The scale and reach of China’s economy, the size of its population, the speed of its technological advancement and its increasing ambition to project its influence on the global stage have profound implications worldwide, including for UK interests. The UK’s integrated review of security, defence, development and foreign policy sets out the Government’s commitment to respond to the systemic challenge that China poses to our security, prosperity and values and those of our allies and partners. At the same time, we are committed to maintaining a robust but functioning relationship. We must try to manage disagreements and preserve space to engage where our interests align.

My friend the right reverend Prelate the Bishop of St Albans asked about the economic and financial dialogue. No date has been agreed for it. Arrangements for it sit within the Treasury.

We are both permanent members of the UN Security Council, and members of the G20. There are mutually beneficial reasons for us to work together, from increasing trade and co-operation in science and innovation to tackling climate change and rebuilding the global economy. As we work to understand and respond to the long-term security challenges arising from China’s increasing assertiveness and the modernisation of its military, we are in good company. As many noble Lords noted, including the noble Lords, Lord West, Lord Alton and Lord Foulkes of Cumnock, there was an unprecedented joint address by MI5 and FBI heads in the last couple of weeks, I think it was. They have a mandate to speak out about threats to our countries and there are serious and well-evidenced concerns. The speech was clear that engaging China is in the UK’s interest. We want UK organisations to be able to engage safely, and they can do so only if they are aware of the potential risks arising from China’s actions.

As the noble Lord, Lord West, noted, in June the Prime Minister joined other NATO leaders to sign off a new NATO strategic concept. To answer the noble Viscount, Lord Waverley, I do not think it is ambiguous. For the first time, it recognises that China’s ambitions and coercive policies challenge the alliance’s interests, security and values. The Prime Minister also met G7 leaders in June, when they renewed their commitment to stand up to China’s efforts to undermine freedom, human rights, and the rules-based international system. For China to be a responsible power requires transparency, good faith and confidence building, and maintaining lines of communication in order to maintain stability and reduce tensions. We encourage China to take its international responsibilities seriously; for example, engagement as one of the permanent members of the Security Council in the P5 nuclear risk reduction process.

The integrated review sets out the Government’s commitment to reduce our vulnerabilities and improve our resilience to persistent threats. Most noble Lords referred to the specific issue of a published strategy. Our approach to China is co-ordinated across government. The FCDO is at the heart of the cross-Whitehall strategic approach to China, but led by the National Security Council, as referenced by the noble Lord, Lord Collins. The integrated review highlights that we will do more to adapt to China’s growing impact, managing disagreements, defending our values and co-operating where our interests align, but it remains the case that we do not publish NSC strategies on China or other issues. We continue to implement a comprehensive and co-ordinated approach to China, which identifies and pursues UK interests in these areas, engaging international partners as we do so.

A number of noble Lords, including, powerfully, I thought, the noble Lords, Lord Rogan and Lord Collins, mentioned Taiwan. The UK, like our international partners, has a clear interest in enduring peace and stability in the Taiwan Strait. The UK’s long-standing position on Taiwan has not changed, as the Prime Minister and Foreign Secretary have made clear. The numerous Chinese military flights that have taken place near Taiwan recently are not conducive to regional peace and stability. We consider the Taiwan issue one to be settled peacefully by the people on both sides of the Taiwan Strait through constructive dialogue, without the threat or use of force or coercion. In June, G7 leaders confirmed their shared perspective on this issue. We support Taiwan’s meaningful participation in international organisations as a member where statehood is not a prerequisite, and as an observer or guest where it is; for example, at the World Health Organization.

The noble Lord, Lord West, and the right reverend Prelate the Bishop of St Albans asked some very pertinent questions around issues in the South China Sea. We remain seriously concerned by militarisation, coercion and intimidation in the South China Sea, and we are opposed to action that raises tensions. We believe in the primacy of the UN Convention on the Law of the Sea, and in freedom of navigation and overflight. We are clear that the UN Convention on the Law of the Sea is the legal framework for all activities in the oceans and seas. That is why we set out our full legal position on the UN Convention on the Law of the Sea and the South China Sea to Parliament in September 2020. We have objected to China’s claims based on the so-called nine-dash line, and the “offshore archipelagos” concept, and believe they are unfounded in UNCLOS. We agree with the findings of the 2016 South China Sea Arbitral Award in this respect and we are supporting ASEAN partners to strengthen maritime law and security capacity, including by delivering law of the sea training in February.

The Royal Navy, as the noble Lord, Lord West, will be delighted to hear, continues to operate in the South China Sea and the wider region, with the Carrier Strike Group having navigated the South China Sea in July and October last year. Building on this deployment, HMS “Spey” and HMS “Tamar” have established a permanent Royal Navy presence in the Indo-Pacific. They have also operated in and around the South China Sea and have been working hard to deepen our relationships with allies and partners throughout the region.

I turn to China’s economic and political influence around the world. It is an authoritarian state, with different values from our own. Our aim is to bring more countries into the orbit of free-market economies. We have launched British investment partnerships as part of the international development strategy, which will contribute to the G7 partnership for global infrastructure and investment. We aim to mobilise up to £8 billion of UK-backed financing a year by 2025, including from investors in the private sector. Additionally, we will invest £1.5 billion to £2 billion a year through British international investment in private sector companies, expanding into the Indo-Pacific and the Caribbean.

A couple of noble Lords referred specifically to the Solomon Islands. As I think I referenced earlier, the UK is committed to and strategically focused on the Indo-Pacific region, as set out in the integrated review. As a long-standing partner and friend, the UK works to support peace and prosperity for the people of the Solomon Islands and across the Pacific region. Our recent deployment of the UK Emergency Medical Team demonstrates our commitment to the Solomons.

We have also taken steps to protect domestic security and increase our resilience. These measures are not targeted at China specifically; they shield us from all potential external threats. We have introduced the National Security and Investment Act to prevent predatory investment that undermines our national security. The noble Lords, Lord West and Lord Alton, and my noble friend Lady Meyer addressed the domestic operations of certain Chinese companies. The National Security Bill will make it even harder for states to commit hostile acts against the UK. In specific answer to the noble Lord, Lord Alton, as he will know, the Business Secretary has decided to call in the acquisition by Nexperia of Newport Wafer Fab for a full national security assessment.

The National Security Bill will modernise our counter-espionage laws and provide our world-class law enforcement and intelligence agencies with new tools to protect us from evolving threats, including from China. It is worth pointing out that we have also enhanced export controls and strengthened measures, including visa vetting, to prevent the transfer of sensitive technologies through academic collaboration.

A number of noble Lords asked about Hikvision cameras. As we have said before, we take the security of our citizens’ systems and establishments extremely seriously and have a range of measures in place to scrutinise the integrity of our arrangements. It remains our long-standing policy not to comment on the detail of those arrangements, but I can say that we are taking robust action to help ensure that UK businesses and the public sector are not complicit in the human rights violations occurring in Xinjiang.

The noble Lord, Lord Foulkes, asked about the extent of the economic threat from China; in particular, coercion. China’s scale of economy, population and ambition means that it will contribute more to global growth than any other country, but it also presents the biggest state-based threat to the UK’s economic security. As an open economy, we welcome foreign trade and investment, including from China, where it supports UK jobs and growth in non-strategic areas, but we will not accept investments which compromise our national security and must make sure that trade is reliable and avoids strategic dependency.

I am running out of time, so will try to race through the last couple of pages of my speech. On cyber, widespread and credible evidence demonstrates that malicious cyberactivity emanating from China poses a threat to UK security. In response to the various cyberthreats we face, we are pursuing a new £2.6 billion national cyber strategy, which will cement the UK’s place as a leading cyber power. We will also continue to raise our concerns with China in private and call it out publicly, as we did alongside 38 like-minded partners in July 2021.

On all these issues, we will continue to co-operate with our allies and like-minded partners. As a European power with global reach, we will continue to play a leading role in the continent’s security. Through our Indo-Pacific tilt, we will continue to deepen our ties with the region, as we have by obtaining ASEAN dialogue partner status and through our AUKUS relationship.

The noble Lord, Lord West, asked about membership of the IP Quad. The UK recognises the need to be flexible in building new partnerships in the region to realise opportunities and manage risks. The Indo-Pacific Quad is an important means for four of the UK’s closest partners in the region—the US, Australia, India and Japan—to work together more closely. The UK is looking at options for closer practical co-operation with the Quad members in these areas, bilaterally and collectively, supplementing our important bilateral partnership.

My noble friend Lord Cormack made an extremely good point: this is a very large subject and deserves a much longer and wider debate. To conclude, the UK is well-prepared to respond to the long-term security challenges emanating from China; we have strong relationships, partnerships and alliances, including through the G7, NATO, ASEAN and other multilateral groups. We have strong security architecture to protect us as the threat from China and other states evolve. We have a permanent regional presence and growing ties in the Indo-Pacific. Underpinning all of those, we have a long-term strategic approach, as articulated in the integrated review. We believe that these collectively equip the UK to adapt to the changing international environment and to China’s increasing international assertiveness.