CHINA
- transfer their technology to the Chinese partner.[1] A decision to invest in the lucrative (and expanding) Chinese market is, therefore, often a trade-off between short- to medium-term gain and the likely loss of control of proprietary information.
- The Intelligence Community previously reported examples of China targeting UK Industry (***) to obtain intelligence, broader information and skills through such joint ventures:
***[2]
- Such actions may have been entirely legitimate commercial engagements under Chinese law, with UK companies being aware of the risks they were subjecting themselves to. However, it is also possible that joint ventures could be used to steal technology and data. MI5 told the Committee that China could:
spot something it likes, to get quite close to that, [and] to get to the point where you are looking at a joint venture, you host a visit, you get lots of the [employees of the] Chinese company that you are going to do the joint venture with coming round, they look at how you are set up, they look at your factory, they spend lots of time and then—at the last minute—the joint venture collapses and a few months later you see [your own technology] produced by China cheaper.[3]
- The critical and far-reaching importance of technical standards set by international bodies was raised by Director GCHQ in evidence to the Committee in October 2020, when he noted that the Chinese strategy to increase its presence at standards-setting bodies meant that it had now begun to dominate them. He cited the International Telecommunication Union and 3rd Generation Partnership Project influential telecommunications technical standards-setting bodies—as organisations in which China has acquired disproportionate influence, including numerous leadership positions.[4] The Intelligence Community judge that:
China is using international forums to shape emerging international standards on key emerging technologies. Defining international standards will enable China to shape technology to suit its own values and priorities, which may differ substantially and be at odds with those of the West. There are significant concerns over the susceptibility of data to state acquisition and exploitation, and the compulsion to accept Chinese norms and standards even if they do not comply with our own. An example of this would be concerns over a free and open internet, compared to China's commitment to central state control over information flow.[5]
- Influence over international standards-setting fora is extremely valuable from a commercial perspective. If companies from a given country in this case, China—own the
132
