CHINA
- in the market. In July 2019, our predecessor Committee published a statement reporting on the first aspect of this Inquiry, Chinese involvement in the UK telecommunications sector—and more specifically the then current issue of whether Huawei should be able to supply equipment to be used in the UK 5G telecommunications network. As this Committee warned. in its 2019 statement, the problem is far bigger than the UK's 5G network: the West is over-reliant on Chinese technology generally and must act now to tackle China's technological dominance. The Committee warned that the Huawei decision was a geopolitical (rather than simply technological) issue and would require careful consideration. However, crucially, it also warned that action must be taken now to tackle the Chinese monopoly in technology generally:
one of the lessons the UK Government must learn from the current debate over 5G is that with the technology sector now monopolised by such a few key players, we are over-reliant on Chinese technology and we are not alone in this, this is a global issue. We need to consider how we can create greater diversity in the market. This will require us to take a long-term view—but we need to start now.[1]
This issue is not unique to telecommunications and we return to it in the Case Studies on Industry and Technology, and Civil Nuclear energy.
- Chinese dominance of technology is driven and supported by the Chinese state. China uses regulation and state subsidies (***) to give its companies an advantage in the global marketplace, and uses its political weight to shape international standards to favour Chinese companies. China is aggressively acquiring technology and expertise through investment, and mergers and acquisitions, as well as by co-opting companies and Academia. Illicit acquisition of Intellectual Property also appears to be a major contributor to China's rapid progress. The JIC Chair confirmed that "[China] is likely to want to access our science and technology base by legitimate and illegitimate means".[2]
- Academia provides China with a means of doing both. While it is the illegitimate means (such as the theft of IP) that may attract the headlines, China is also adept at making the most of overt routes (such as Foreign Direct Investment and joint ventures). Working in plain sight, China directs, funds and collaborates on academic research for its own ends, in particular seeking to benefit the Chinese military through targeted research on dual-use techniques and to secure economic advantage over the West. The vast number of Chinese students—especially post-graduates—in academic institutions in the UK provides a further opportunity.
- China uses some students to operate as non-traditional collectors of IP particularly those involved in cutting-edge research and development ***. In some cases, these students obscure their military affiliations, including through the use of misleading historical names for their institutions or even the use of non-existent institutions.[3] Once established in academic institutions in the UK, these students are in a position to identify and exfiltrate valuable IP and data. Once in China's hands, IP and data are used to build or short-cut
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