Page:ISC-China.pdf/9

1. METHODOLOGY: OVERT ................................................................................................................................................................................................................................................................................................................................................................................................

   129

2. Licensing agreements ................................................................................................................................................................................................................................................................................................................................................................................................

   129

3. Foreign Direct Investment ................................................................................................................................................................................................................................................................................................................................................................................................

   129

4. Inward investment into China ................................................................................................................................................................................................................................................................................................................................................................................................

   131

5. Standards-setting bodies ................................................................................................................................................................................................................................................................................................................................................................................................

   132

6. METHODOLOGY: COVERT ................................................................................................................................................................................................................................................................................................................................................................................................

   135

7. Human intelligence ................................................................................................................................................................................................................................................................................................................................................................................................

   135

8. Cyber ................................................................................................................................................................................................................................................................................................................................................................................................

   137

9. THE UK GOVERNMENT RESPONSE ................................................................................................................................................................................................................................................................................................................................................................................................

   139

10. Understanding the task ................................................................................................................................................................................................................................................................................................................................................................................................

    139

11. Foreign investment and national security ................................................................................................................................................................................................................................................................................................................................................................................................

    141

12. Disrupting activity ................................................................................................................................................................................................................................................................................................................................................................................................

    147

13. CASE STUDY: CIVIL NUCLEAR ENERGY ................................................................................................................................................................................................................................................................................................................................................................................................

    150

14. CHINESE INTEREST AND INVESTMENTS ................................................................................................................................................................................................................................................................................................................................................................................................

    151

15. China's interest in the UK Civil Nuclear sector ................................................................................................................................................................................................................................................................................................................................................................................................

    152

16. Chinese investments ................................................................................................................................................................................................................................................................................................................................................................................................

    153

17. Linked investments ................................................................................................................................................................................................................................................................................................................................................................................................

    155

18. ESPIONAGE AND INFLUENCE ................................................................................................................................................................................................................................................................................................................................................................................................

    159

19. Espionage: Incentive and opportunity ................................................................................................................................................................................................................................................................................................................................................................................................

    159

20. Influence: Leverage and disruption ................................................................................................................................................................................................................................................................................................................................................................................................

    163

21. The position of the United States ................................................................................................................................................................................................................................................................................................................................................................................................

    165

22. THE GOVERNMENT RESPONSE ................................................................................................................................................................................................................................................................................................................................................................................................

    171

23. Cross-government scrutiny of foreign investment ................................................................................................................................................................................................................................................................................................................................................................................................

    172

24. Regulation ................................................................................................................................................................................................................................................................................................................................................................................................

    174

25. Intervention: The 'special share' ................................................................................................................................................................................................................................................................................................................................................................................................

    175

26. Advice to Industry ................................................................................................................................................................................................................................................................................................................................................................................................

    177

27. Wider UK Intelligence Community efforts ................................................................................................................................................................................................................................................................................................................................................................................................

    180

28. ANNEX A: COVID-19 ................................................................................................................................................................................................................................................................................................................................................................................................

    181

29. Investigation of origin ................................................................................................................................................................................................................................................................................................................................................................................................

    182

30. China's initial response ................................................................................................................................................................................................................................................................................................................................................................................................

    184

31. Disinformation ................................................................................................................................................................................................................................................................................................................................................................................................

    186

32. Vaccine development and medical espionage ................................................................................................................................................................................................................................................................................................................................................................................................

    187

33. Debt leverage ................................................................................................................................................................................................................................................................................................................................................................................................

    189

34. Capitalising on the pandemic ................................................................................................................................................................................................................................................................................................................................................................................................

    190

35. Impact on the UK Intelligence Community ................................................................................................................................................................................................................................................................................................................................................................................................

    190

36. ANNEX B: FULL LIST OF CONCLUSIONS AND RECOMMENDATIONS ................................................................................................................................................................................................................................................................................................................................................................................................

    193

37. ANNEX C: CODE WORDS ................................................................................................................................................................................................................................................................................................................................................................................................

    205

38. ANNEX D: LIST OF WITNESSES ................................................................................................................................................................................................................................................................................................................................................................................................

    207

39. Officials ................................................................................................................................................................................................................................................................................................................................................................................................

    207

40. External Expert witnesses ................................................................................................................................................................................................................................................................................................................................................................................................

    207