China spy fiasco reveals alarming truths about UK economy and our defence | Politics | News

Few scandals engage public interest more than those involving spies.
In part, this is down to the extraordinary literary contributions of John Le Carre and Ian Fleming.
And the common theme in nearly all of these stories – many of which were turned into blockbuster films – is a clear villain. An enemy. A “baddie”.
That’s where the current scandal engulfing Parliament, Number 10 and the Crown Prosecution Service becomes a series of contradictions and confusion.
For those in the national security community, the equation is crystal clear. Beijing is a threat.
Chinese spies try to steal state secrets, academic research, business information and harass and kidnap dissidents living in the UK on a daily basis.
They are also targeting politicians in a bid to sway public policy towards China.
Beijing, and particularly the Chinese Communist Party, wants to rewire the global order where the West is no longer on top, where Xi Jinping is unquestionably the most powerful man in the World.
To do so, China is seeking total economic dominance. Through its Belt and Road Initiative, the CCP wants to “invest” in more than 150 countries and create global trade routes.
But critics argue that what Xi Jinping is doing is engaging in “debt trap diplomacy” by luring poorer countries and developing economies into expensive infrastructure projects where the exorbitant interest rates bind Governments closer and closer to China.
And the Chinese have sought to dominate every industrial supply chain, making them critical to every advanced economy in the era of globalisation, where companies seek out cheap options to more expensively produced products in the West.
But, alarmingly, this does not stop with the civilian sectors.
Britain’s new F35 stealth fighter jets, for example, require rare earth minerals predominantly controlled by China. In fact, many advanced weapons systems used by Western militaries rely on rare earth minerals from China.
Analysts believe Beijing controls more than 80% of global rare earth production.
This means that in the terrifying context of a war with China, Western militaries would be trying to buy components produced in the very country which has armed Russia, and repeatedly threatened to invade Taiwan. Such an invasion would smash the global economy to smithereens.
With Beijing’s tentacles spreading across the World, Chinese intelligence agencies have also taken an indiscriminate approach to data.
Britain’s top intelligence officer, Sir Ken McCallum warned in 2023 that MI5 had seen “a sustained campaign on a pretty epic scale”. They try to hoover up everything they can, including inconsequential details, to build the biggest picture they can.
It’s a scale of operation that the West cannot match. But it can warn society, and help it to fight back.
It’s against this backdrop that the scandal over the bungled prosecution of Christopher Cash and Christopher Berry erupted.
They were accused of passing sensitive information to a Chinese intelligence agent, who then handed it to a top-ranking member of the Chinese Communist Party.
Both have denied the charges.
But the case collapsed precisely because of a row about whether the Government had gone far enough in labelling China a threat.
This quickly led to accusations that Labour was prioritising an economic relationship with Beijing over national security.
There are two important aspects to this. One is that the Treasury is terrified the flow of Chinese money into the economy would stop, blowing a hole in the Government’s finances as growth falls.
And the other concern is that Beijing could just switch off access to vital supply chains.
Governments on both sides of the House of Commons have often nuanced their language to try and protect their trade relationship whilst protecting the state’s most guarded secrets.
But, as the Daily Express revealed in 2023, Chinese hackers even attempted to steal details of the AUKUS nuclear submarine programme.
So, whilst Keir Starmer is planning a landmark trade trip next year, and the planning inspectorate continues to consider proposals for a super embassy in the heart of London, Beijing continues at pace to seek a strategic advantage.
That is evidenced by the revelation that MI5 foiled a plot in the past week.
But when it comes to the wider public, a frustration within the national security community is that people don’t see quite how big the threat is.
It’s certainly different from those posed by Russia, and Iran, who are directly involved in assassination, kidnap, sabotage and arson conspiracies.
But Labour has undoubtedly got itself in a complete mess over China this week.
For months it has sought closer ties, whilst simultaneously saying they stand up to China. Then, when the Director of Public Prosecutions asked for them to provide a bit more evidence that China was indeed a threat to national security, the Government refused.
It’s a position that has baffled many in Westminster, particularly when the witness statement by Deputy National Security Adviser Matthew Collins stated: “The UK Government identified a pattern of malicious cyber activity by Chinese state-affiliated organisations and individuals targeting democratic institutions and Parliamentarians as part of large-scale espionage campaigns that had taken place during that time.”
But, curiously, and this is what has created the political intrigue around this case, he added: “The UK Government is committed to pursuing a positive relationship with China to strengthen understanding, cooperation and stability.
“The Government’s position is that we will co-operate where we can, compete where we need to and challenge where we must, including on issues of national security.”
So, this crisis has become a game of asking who knew what and when?
Downing Street has insisted no minister or special advisor had been involved in the evidence.
But that claim has been cast into doubt by Mr Collins’ phraseology. The “Three C’s approach” was mentioned in Labour’s election manifesto.
And Tory leader Kemi Badenoch said the submission amounted to a “lovely statement about how great China was”.
Leading China hawks have this week demanded the Government use the spy scandal to reset the approach to Beijing.
One of the main issues they are focusing on are plans for the Chinese super embassy.
Again, this is significant on two fronts. Intelligence chiefs have long spoken of how embassies can be used as bases for spies, giving them secure communication channels and a place to formulate plots away from the security service’s glare.
As well as, of course, diplomatic cover.
But its location has also prompted fears Beijing could intercept vast swathes of data being transported underground between the City of London, Parliament and the rest of London.
All of the major political parties are calling on the Prime Minister to step in and block the proposal.
And perhaps the reaction of the Chinese is the best illustration of how they truly perceive Britain?
They stated the UK must “immediately fulfil its obligations and honour its commitments otherwise the British side shall bear all consequences”.
Downing Street denied there had been any commitments.
But this latest revelation has illustrated how transactional Beijing can be – and if things begin to go their own way, they very quickly go on the attack.
As the MI5 Director General, Sir Ken McCallum put it: “Do Chinese state actors present a UK national security threat? The answer is, of course, they do, every day.
“I said that last year, I said it the year before, I said it the year before that.
“If I’m in this job a year from now, I’m sure I will say it then too.”
So, even though the Chinese Communist Party are not the stereotypical “villain” identified in spy novels, particularly because the UK must do business with them, they are clearly one of the biggest state threats facing Britain.
And they must be treated, unambiguously, so.