A Commons committee says ministers should set out “red zones” closed to Chinese investment and ban connected Chinese devices from critical infrastructure. The government says its approach is consistent.
The government is making up its China policy “as it goes along”, leaving businesses without clear rules and national security risks unmanaged, a committee of MPs has said.
In a critical report published on Monday, the Commons business, innovation, science and trade committee said ministers had failed to deliver the “strategic, long-term, consistent” approach to China they promised in 2024.
“Britain’s businesses cannot plan for the future when the government keeps making up its China policy as it goes along,” said Liam Byrne, the Labour MP who chairs the committee. “Ministers promised clarity and consistency. Instead, we have opportunities missed, risks unmanaged and decisions left until the eleventh hour.”
The government said it disagreed with the committee’s conclusion.
The MPs called on the government to set out “red zones”, industries where Chinese investment would be off-limits, and “green zones” where trade and investment would be encouraged, to give companies clearer rules.
They also urged ministers to ban connected Chinese devices from critical national infrastructure, block the transfer of sensitive data to China and ban imports made using forced labour. Universities should get faster advice on research partnerships with Chinese bodies, the report said.
The committee said low-cost Chinese connected technology had become widespread in Britain, and that in this area the government had “prioritised diplomatic politeness over the UK’s national security”.
The report singled out internet-connected cars. Modern vehicles can carry dozens of connected sensors, including cameras inside and out, and some self-driving systems allow cars to be driven remotely, a capability the MPs said posed a “potential risk to life”.
“The Chinese security services could require China-based manufacturers to grant access to such systems and use this access to disrupt foreign countries’ transport and logistics systems,” the committee said.
It called for connected vehicles and other “internet of things” devices made in China to be kept out of critical businesses and sensitive sites. Telecoms companies should also monitor traffic between connected vehicles and foreign entities in sectors such as defence and the emergency services, it said.
The US has already banned Chinese software in connected vehicles from 2027 and Chinese hardware from 2030.
The MPs urged ministers to start preparing tariffs that could be used if China keeps subsidising its industries or fails to offer “fully reciprocal” access to its market, including on electric vehicles.
The EU has imposed tariffs of up to 35.3% on Chinese-made electric cars, capped hybrid imports and is considering a Franco-German proposal for a “kill switch” to block imports if China uses trade as a weapon. “The UK’s partners are moving further and faster,” the report said.
Byrne said the government “should be prepared to consider dynamic alignment” with EU measures, including tariffs on electric vehicles, “as the price of securing British firms a place in the EU’s Made in Europe project”.
Business Secretary Jonathan Reynolds has said he will make a decision in the UK’s best interests, and has warned that Beijing could retaliate against British carmakers such as Jaguar Land Rover.
Chinese brands are increasingly popular with British buyers. The Chinese-made Jaecoo 7 was the UK’s best-selling car in September.
The committee criticised a series of one-off decisions, including the move in March to block Chinese firm Ming Yang from building a £1.5bn wind energy plant in Scotland on unspecified security grounds, and the emergency takeover of British Steel from its Chinese owners.
Those decisions had been “characterised by reactivity, inconsistency and opacity”, the report said. Scotland’s first minister, John Swinney, has called on Burnham to reconsider the Ming Yang decision.
An audit of UK-China relations was completed last year, but the government has not published it in full, saying it contains classified information.
A government spokesperson said: “We recognise the committee’s work on this report, but we disagree with its conclusion. Our approach to China is consistent: we will co-operate where we can and challenge where we must.”
“We have placed our relationship on a more stable, balanced, long-term footing, and based it on a clear-eyed assessment of both the opportunities and the risks,” the spokesperson added.
“Our trade strategy makes clear that we will capitalise on every opportunity to grow our economy while never compromising on our national security.”
Andy Burnham has yet to set out his position on China since replacing Sir Keir Starmer, who visited Beijing in January, the first official trip by a UK prime minister since Theresa May in 2018.
The report adds to pressure on Burnham before an EU summit in Brussels on 20 November, where he is expected to set out plans for closer ties with the bloc.
“Britain must shape its own relationship with China, or risk having that relationship shaped for us in Washington or Beijing,” Byrne said.