Britain’s intelligence agencies have belatedly admitted the gravity of the challenge. After a decade of neglecting the threats posed by an increasingly assertive China, MI5 warned of the “epic scale” of CCP espionage: the world’s largest intelligence apparatus, which commands tens of thousands of officers and agents, targets the UK “prolifically and aggressively”. According to MI5’s director, the CCP represents Britain’s most “game-changing” security challenge.

Yet while MI5 sounds the alarm, Britain’s response remains entirely incoherent. This month, the most serious breach of parliamentary security in living memory — an alleged spy operation run on behalf of the Chinese state — collapsed in court. Despite “slam-dunk” evidence of intelligence reaching Beijing’s top leadership, the Crown Prosecution Service could not persuade a single minister to state, on record, that China posed a national-security threat during the charge period.

On 21 October, the Labour government will decide whether to approve the construction of a vast Chinese embassy, opposite the Tower of London. This represents more than a planning dispute: it is a choice of whether to anchor, in the heart of the capital, the surveillance machinery of a one-party state which systematically crushes free expression, jails lawyers, and tortures its critics. The five-acre compound, heavily fortified and opaque by design, would be Britain’s largest foreign mission, housing more than 200 CCP employees and their families — any number of whom could be intelligence operatives.

The site offers Chinese intelligence an ideal perch within the arteries of the British economy. It is slated to sit directly atop sensitive fiber-optic cabling which transmits the City of London’s financial data — and a large share of global transactions. And this is a regime at the bleeding edge of digital surveillance technologies, actively working to reengineer the global financial system away from the dollar, and towards the Chinese yuan. Former MI6 chief Sir Richard Dearlove has warned that such proximity could allow China, “with impunity”, to tap those lines and “collect anything and everything going down those communication chains”. The White House has already expressed “deep concern”. For Britain’s allies, this is a critical test of reliability: as a member of the Five Eyes intelligence sharing network, the UK cannot afford to be regarded as the “weak link” through which sensitive intelligence might bleed to Beijing.

While intelligence officials now reassure Parliament that the risks are “manageable”, it is not clear why Britain’s allies should be convinced. The CCP has already successfully infiltrated Parliament; cultivated influence within the monarchy, and mounted large-scale cyber-attacks which compromised the data of 40 million UK citizens. Now, the collapse of the spy-case prosecution has dispelled any pretense of control. Britain’s China problem is an open wound — exposed, untreated, and festering in full view of its allies.

Beijing has made little effort to assuage concerns. On the contrary, it has refused the British government’s request to explain why its blueprints include mysteriously blacked-out rooms and an underground tunnel, insisting that further detail is “neither necessary nor appropriate”. It is a curiously contemptuous attitude. And when the roles are reversed, it becomes absurd. It is inconceivable that China would permit Britain to erect a vast fortified compound on Chang’an Avenue — within walking distance of the Zhongnanhai leadership compound and atop critical data infrastructure — let alone tolerate omissions labeled “none of your business” in the plans.

Chinese intelligence services represent a different kind of threat from most other states. Edward Snowden’s disclosures stripped away a polite fiction, revealing that embassies are not neutral houses of diplomacy, but platforms for espionage. Yet where embassies are typically used to gather information or advance strategic interests, Beijing integrates traditional espionage with the policing of ideology abroad. Its mission goes beyond the defense of China’s security to the preservation of the CCP’s monopoly on power through silencing critics wherever they live. This entails monitoring, intimidating, and neutralizing civilians — including students, dissidents, exiles, and academics — as much as it targets foreign governments.

At the heart of this effort is the Party’s United Front system, a global political influence network operating through Chinese embassies to co-opt institutions, silence dissent, and enforce ideological conformity beyond China’s borders. In practice, this means surveillance of diaspora communities, pressure campaigns against exiles, and harassment of activists associated with the CCP’s so-called “five poisons”: Tibetans, Uyghurs, Taiwanese independence advocates, Falun Gong practitioners, and Chinese democracy activists. Uyghur activists in Britain have been threatened, while Hong Kong activists, including then-teenager Chloe Cheung, have had bounties placed on their heads. At times this repression has been brazen — as in 2022, when a Hong Kong pro-democracy protester was dragged by his hair into China’s Manchester consulate and beaten — but more often it works through fear and impunity, creating conditions where critics censor themselves rather than risk retaliation.

Suggested reading

How the CCP infiltrated Britain

By Sam Dunning

This machinery has already extended into British academia. The Party’s ears and eyes are embedded within UK campuses through the United Front system. Chinese Students and Scholars Associations, nominally cultural clubs, double as surveillance and pressure groups against dissenting voices on campus — reporting on peers and pressuring universities to cancel events critical of Beijing. At Cambridge, one friend, whose father was imprisoned and likely tortured in Xi Jinping’s political purge, confided that she only ever dared to speak about politics behind closed doors in her room, never on campus. “You never know who is listening,” she told me. Politically vetted teachers at Confucius Institutes, another arm of the Chinese state, mold China syllabi in the CCP’s image in over 30 British universities.

A CCP mega-embassy in London would reinforce this apparatus of intimidation. Britain cannot credibly condemn Beijing’s abuses in Xinjiang, Tibet and Hong Kong while granting the Party greater capacity to harass its critics and chill debate on its own soil. To do so would not just endanger dissidents; it would accelerate the alarming drift towards illiberalism already visible in the UK, at a moment when comedians are arrested over provocative tweets and elderly ladies are branded as terrorists for holding pro-Palestine placards. It would also embed in British territory the very form of arbitrary power the country has spent centuries struggling to restrain.

For much of British history, the royal prerogative was enforced through terror — treason suspects could vanish into the Tower without trial or be disemboweled before jeering crowds. Slowly, a constitutional tradition was formed in opposition to such tyranny: Magna Carta bound the monarch to law; the Habeas Corpus Act barred imprisonment without charge, the Bill of Rights curtailed the Crown and secured freedoms of speech and petition, and, in modern times, the Human Rights Act armed the individual with legal protections. The settlement which emerged is simple and profound: no one is above the law, no one is beneath its protection.

China under the CCP represents the inversion of this tradition. Its leaked “Document No. 9”, circulated under Xi Jinping in 2013, castigated constitutional democracy, universal human rights and press freedom as “extremely malicious” Western imports. The Party does not recognize law as a constraint on power but wields it as a tool of domination. Arbitrary detention is routine, from the mass internment of Uyghurs in Xinjiang to the prosecution of peaceful activists in Hong Kong. And freedom of expression is curtailed by the most comprehensive censorship and surveillance system on the planet. Petitioners who persist in challenging authority may be imprisoned or forcibly confined in psychiatric hospitals, fed anti-psychotics in the name of “stability”.

The implications of inviting such a system to plant its largest embassy in Europe beside the Tower of London would be long-lasting and corrosive. To the Chinese diaspora in Britain, it would signal that their security cannot be guaranteed. To allies, it would suggest Britain is a weak link in the defense of the international order, shared intelligence, and common values. And to the world, it would mark the end of Britain’s reputation as a defender of liberty.

Ten years on, Donald Trump has waved aside decades of climate science as a “con job”, recently joining Saudi Arabia in sinking a landmark deal that would cut global shipping emissions. Meanwhile, Europe, bound by the knots of its own climate bureaucracy struggles to execute an ambitious industrial strategy. At COP30, Brussels will speak the language of leadership — but with diluted goals and waning momentum. Washington, turning inward as a newly unapologetic petrostate, may arrive only to heckle from the wings. The climate consensus is fracturing.

China will arrive in Belém with confidence — and control.Over the past decade it has built the world’s most complete clean-energy manufacturing base: it now produces well over 80% of global solar modules, leads the battery supply chain from raw materials to final assembly, and dominates the rare-earth mining and processing vital for EVs, wind turbines and electronics. Clean-energy projects around the world depend on components that pass through its industrial ecosystem. Put simply, Beijing controls the infrastructure of decarbonization.

More from this author

Who whacked Jensen Huang?

By Elizabeth Lindley

As the principal architect of the low-carbon era, China can build what others only promise — but at a price. For some, Beijing remains an indispensable partner in decarbonization, able to mobilize capital, equipment and contractors faster and cheaper than Western institutions. But others are more cynical, regarding China’s strategy as a new form of green colonialism. China’s ascent as the world’s system-builder inspires as much admiration as unease.

With its grip on global supply chains, China has de facto control over certification regimes, pricing structures, and emergent standards for green finance, all of which increasingly govern market access. The electric-vehicle sector offers a glimpse of what is to come: Chinese batteries and EVs may have higher life-cycle emissions than Japanese or Korean rivals, yet cost and scale have allowed Beijing to dictate the terms of competition. Falling emissions are reinforcing China’s claim that state direction delivers results.

But Beijing’s path to decarbonization is riddled with contradictions. China is both the world’s dirtiest industrial behemoth and its leading green architect. In 2024, China broke records for wind and solar installation even as it approved more coal plants than at any point over the last decade. Critics interpret this as “green-washing” or bad faith, but for Beijing, it’s “sequencing” — the belief that industrial might in strategic sectors must come before emission cuts.

It is a transition philosophy without precedent. “The path, method, pace and intensity… must be determined by ourselves,” Xi Jinping has insisted. What has followed is a multi-trillion-dollar experiment: China is attempting to reach its dual carbon goals — peaking CO2 emissions before 2030 and achieving carbon neutrality by 2060 — without dismantling the largest industrial base on Earth.

For Beijing, industrial strength is the foundation of geopolitical power. Commanding roughly 35% of global manufacturing, with projections of 45% by 2030, manufacturing is not something China is willing to trade for climate credibility. On the contrary: it believes the world’s low-carbon future can only be built by those who still know how to make it.

In Beijing’s view, whoever builds the clean-energy economy will write the rules of the next world order — just as the United States once did through oil, arms and the dollar. Decarbonization, by this logic, is statecraft, not climate stewardship. Domestically, it doubles as an insurance policy,  securing water, food, and energy on China’s terms before scarcity and climate shocks arrive. This strategy grants Beijing the mandate to plan decades ahead and mobilize entire sectors.

China can also pursue policies that would be unthinkable in pure market economies. While Western governments set climate targets and leave delivery to the market, Beijing intervenes directly. Strategy is directed from the top, and capital is treated not as a market outcome, but as an instrument of national power. Policy banks funnel cheap finance into strategic sectors often years before they are commercially viable. State-owned firms absorb early risk, allowing new technologies such as carbon-neutral steel and advanced battery chemistries to be trialed without needing to turn a profit. Once a technology shows promise, the state withdraws protection and unleashes a brutal survival-of-the-fittest competition: the strongest are rapidly scaled up, the rest are abandoned.

Contemporary Amperex Technology Ltd. (CATL) is a product of this system. A decade ago, China granted subsidies to dozens of battery startups before ruthlessly pruning the sector. Graveyards of failed EV startups now ring the outskirts of Hangzhou and Nanjing. CATL survived the cull, and was quickly scaled up into a “national champion”. Today, its dominance in battery technology anchors China’s lead in the global EV supply chain.

It is not tidy or efficient, but waste and failure are built into the system. Duplication builds capacity; missteps refine technology. Beijing doesn’t care about short-term profitability, instead incubating firms that will dominate the industries of the future.

Foreign expertise has also helped to accelerate industrial innovation. Tesla’s experience in China is a case in point. Lured into Shanghai with tax breaks, land grants and regulatory exemptions, it was welcomed not just as an investor but as a benchmark against which domestic firms would be forced to compete. Silicon Valley might have interpreted this move as market openness for Beijing, though, it was a controlled experiment in technological transfer. Within a year, nearly 90% of Tesla’s Shanghai-made components were sourced locally. The company thrived, but so did the rivals it helped train. Elon Musk laughed off BYD as a joke in 2011; by 2023, it was outselling him. China hosted the world’s most celebrated innovator to train its own, and then scaled beyond his reach.

This dual system — ruthless competition steered by state direction — has already delivered China’s overwhelming manufacturing dominance in solar panels, batteries, and electric vehicles. Now Beijing is applying it to the dirtier, harder-to-abate sectors.

Suggested reading

China is back in business

By John Rapley

Greening heavy industry is one of the toughest frontiers in climate action. Steel, cement and aluminum are responsible for a third of China’s emissions and more than half of global output. These sectors are the backbone of the modern economy — and they are almost entirely coal-dependent. Replacing that foundation is  technically daunting and financially risky;blast furnaces burning at over a thousand degrees cannot be wished away. Instead they must be carefully reengineered with new, low-carbon technologies. Those alternatives, including hydrogen-based steelmaking, carbon capture and low-carbon smelting, demand deep pools of capital and years of industrial trial and error. China’s system is built to keep funding the effort until one of them works.

Now, China has an opportunity to experiment with changes to production without disrupting growth. A prolonged slump in the property sector and population decline have lowered demand for carbon-intensive cement and steel, driving a fall in emissions. This slowdown affords Beijing breathing room to trial hydrogen and carbon capture technologies, all while embedding its own certification systems into supply chains.

The stakes are enormous: Beijing is betting that it can decarbonize the world’s largest industrial base and then export the model abroad. Success would not only yield clean factories, but would grant China the power to define what counts as “green” and thus shape the standards of global trade.

Beijing is seizing the opportunity to build a parallel economic order. Through carbon certificates, “zero-carbon” industrial parks, and an expanding taxonomy of green finance, it is embedding Chinese standards into global regulation and capital flows. These mechanisms are fast becoming the plumbing of 21st century commerce: converting carbon footprints into tradable data, and data into passports for goods and investment. In the coming decade, carbon content will likely become a default value — printed on everything from car batteries to shipping containers. Beijing wants to be the one writing the label.

The longer the United States and its allies delay a credible counteroffer, the more likely it becomes that the world’s low-carbon future will be wired, financed, and standardized in Beijing. Western policymakers increasingly recognize the scope of China’s industrial strategy — but their responses remain piecemeal and defensive: tariffs, tax credits, and talking points in place of coordinated vision. As COP30 convenes in Belém, that asymmetry is laid bare. All eyes are on China.

Britain, by contrast, has no comparable strategy. Its absence of long-term vision has made it an easy target for the Chinese Communist Party (CCP), whose strategic ambitions unfold over decades. Nowhere is this clearer than in the sale of Imagination Technologies, a crown jewel of British innovation whose semiconductor designs are powering the next technological era. Since its acquisition by a Chinese state-linked firm in 2017, Imagination’s Graphics Processing Units (GPU) and AI accelerator technology have been absorbed into China’s AI ecosystem, driving the very breakthroughs that now challenge Western dominance.

This was no ordinary corporate acquisition, but a reckless surrender of future-defining technology to a geopolitical competitor — a decision emblematic of Britain’s strategic myopia.

Imagination Technologies specializes in the design and licensing of energy-efficient GPUs. Originally developed for rendering film and video game graphics, GPUs have evolved into critical hardware for artificial intelligence (AI) development, now enabling breakthroughs in applications from productivity software to autonomous vehicles, and in military technologies such as automated weapons targeting, and drones. While Nvidia dominates the market for high-performance GPUs, Imagination’s expertise in mobile and low-power GPU design is strategically significant, enabling the mass deployment of AI across consumer and industrial networks. These technologies support AI integration in smart cities, autonomous systems, and the connected infrastructure of the future.

Suggested reading

China's unstoppable STEM army

By Sam Dunning

For years, Apple was Imagination’s largest and most lucrative client. But that all changed in April 2017, when Apple announced it would no longer use Imagination’s technology, triggering a collapse in the firm’s valuation — from £2 billion to just £550 million. Within months, Canyon Bridge, a Delaware-based private equity firm heavily funded by China Reform Holdings — a Chinese state-owned enterprise under direct CCP oversight — moved in to acquire it. China Reform was, theoretically, positioned to exert influence over Canyon Bridge and, by extension, Imagination. Despite this warning sign, the UK Government approved the acquisition, reassured by promises that China Reform would remain a passive investor. This was a terrible miscalculation — and one that betrayed a naivety about how China’s centralised state apparatus executes strategy.

Illusions of China Reform’s “passivity” crumbled in 2020, when it attempted to install four of its own directors onto Imagination’s board. The move ignited a fierce backlash within the company and alarmed Government officials. Under mounting public scrutiny, Global Counsel — a “strategic advisory” firm founded by Lord Mandelson, now British Ambassador to the United States — was hired by Canyon Bridge to “reassure UK stakeholders” about Imagination’s operations.

Just months before this attempted coup, Mandelson, a former UK cabinet minister and then-president of the publicly funded Great Britain China Centre, traveled to China with his aide to discuss “cooperation opportunities” with China Reform’s senior leadership. By his own account, the visit was a success, deepening ties between China Reform and Global Counsel — an advisory firm that soon after (it claims coincidentally) was enlisted to manage the fallout of Imagination’s crisis. Mandelson denies involvement in the Imagination case. The optics, however, are disturbing: corporate — and, perhaps, political — influence diluted scrutiny of a state-linked transaction with lasting implications for Britain’s national security and technological future.

Though Whitehall ultimately blocked the board takeover, Britain had already lost control over Imagination. Company CEO Ron Black was sacked after citing concerns over Chinese government interference, while other senior executives resigned. Testimony uncovered by UK-China Transparency revealed that in 2020 and 2021, Imagination’s intellectual property and key assets were quietly funneled to Chinese GPU companies through “unusual and undisclosed knowledge-sharing agreements”. Two of the recipients, Moore Threads and Biren Technology, were sanctioned by the US in 2023 for their ties to China’s military-industrial complex. In this way, a key British technological asset was effectively dismantled, its innovations repurposed to advance the ambitions of the CCP. The British Government had either gravely underestimated the strategic intent of Chinese leaders — or it had simply been outmaneuvered.

This was just another step in the CCP’s broader strategy. In 2014, Beijing released plans to position China’s semiconductor ecosystem as a global leader by 2030, backed by a $150 billion National Integrated Circuit Fund to advance cutting-edge research and cultivate “national champions”. A year later, Made in China 2025 introduced the bold target of producing 70% of semiconductors domestically by 2025. These policies were reinforced in 2016 by the Innovation-driven Development Strategy, which funneled unprecedented governmental resources into research, talent cultivation, and infrastructure for China’s high-tech industrial ecosystem.

By 2017, Beijing’s semiconductor ambitions were already well-advanced — and raising alarm among Britain’s allies. It was becoming clear that China was executing a disciplined whole-of-state strategy to “leapfrog” key stages of semiconductor development, leveraging state funding and systematically extracting technology from foreign companies through acquisitions, joint ventures, and knowledge-transfer agreements. State-linked entities, including China Reform, played a key role in absorbing critical expertise into the country’s domestic ecosystem — securing intellectual property through licensing deals, embedding Chinese engineers into overseas R&D teams, and orchestrating takeovers of foreign semiconductor firms, including Imagination.

Shortly before Imagination Technologies’ sale, the US moved decisively to block Canyon Bridge from acquiring an American semiconductor firm, citing national security risks tied to Beijing’s industrial policy and the need to protect such critical technology. Britain, however, failed to shield Imagination, appearing blind to Washington’s caution. Not only did it ignore the emerging centrality of semiconductors in great power competition, but it overlooked the patterns of logic behind the CCP’s moves.

The CCP’s industrial, technological, and geopolitical goals are all situated within an ideational framework: Xi Jinping’s China Dream. This vision drives the CCP’s pursuit of strategic aims, guiding China’s transformation into a prosperous, technologically sovereign, and globally dominant superpower by 2050. Central to Xi’s Dream is the principle of technological “self-reliance”, aimed at reducing dependence on foreign technology, securing supply chain control, and establishing leadership in critical sectors, including semiconductors. With ideological clarity and strategic patience, China is steadily realizing decades-long ambitions for national rejuvenation, exploiting the disarray and short-termist thinking of less cohesive nations.

The failure to shield Imagination is not an anomaly, but a symptom of Britain’s deeper strategic paralysis. The January 2025 Commons debate which followed Rachel Reeves’s visit to Beijing provided a glimpse into Britain’s ongoing dysfunction. It was a performance which, if I were a Chinese strategist tasked with formulating UK policy, I would watch gleefully with my colleagues as we sipped Maotai and munched peanuts. The backdrop of the debate was Labour’s decision to resume economic dialogue with Beijing prior to publishing its promised and long-delayed China audit — a critical step in assessing the range of risks, opportunities and priorities in this complex relationship. Amid Reeves’s incomprehensible celebration of having secured £600 million “of tangible benefit for British businesses” (a figure akin to pennies found down the back of Beijing’s sofa), the debate descended into jeering and partisan mud-slinging, devoid of both cross-party solidarity and a sense of Britain’s long-term national interest.

Suggested reading

Why China is winning the weapons race

By Sam Dunning

The fragmentation exposed during the debate reflects an underlying malaise: Britain has yet to establish a coherent hierarchy of values to guide its China policy. Parliament is fractured along ideological, strategic, and even regional lines, and Government departments engaging with China are split too. The Department for Business and Trade prioritizes economic ties, while GCHQ and MI5 warn of escalating security threats and the Foreign Office grapples to balance diplomacy with the defense of human rights and rule of law. Such ideological incoherence leads to siloed decision-making and mixed messaging. Whitehall’s fragmentation is further exacerbated by private interests which, in the absence of a clear overarching framework, can sway policy in directions that undermine Britain’s national security. The role of Mandelson’s lobbying firm in the Imagination fiasco illustrates how unreconciled agendas — whether between departments or state and private actors — breed strategic incoherence. China’s geopolitical rise is too important for Britain to proceed divided.

Should economic growth outweigh national security considerations? Can Britain credibly champion universal principles such as human rights and the rule of law while deepening ties with a regime which views them as existential threats to its own survival? Such questions are exceedingly complex and remain unanswered, as the Government has yet to articulate a clear vision for its relationship with Beijing — nor how its China policy will fit within Britain’s broader ambitions in the decades to come.

Keir Starmer is reportedly planning a trip to Beijing later this year, which would make him the first UK prime minister to visit in more than seven years. He has promised a “consistent, durable, respectful” relationship with China. Yet consistency and durability will be impossible in the absence of a unified, supra-partisan national strategy.

Without a long-term vision, the UK will continue to forfeit tools of power and credibility needed to remain influential in the 21st century. The case of Imagination Technologies illustrates the stakes: Britain is ill-prepared to confront a competitor that not only commands vast scale and resources, but which also thinks and plans in decades. In a world increasingly shaped by China’s ambitions, Britain must conjure a unified vision — or else risk continued erosion of its technological advantage and credibility as a global power.