Ministers are facing warnings about the extent of China’s involvement in Britain’s critical infrastructure amid a race to keep furnaces at British Steel’s Scunthorpe site going.
The government’s decision to step in to protect the company has shone a spotlight on other areas of critical infrastructure in which Chinese firms have a stake.
Not all companies in China will support President Xi’s regime, but all private companies in the country have a legal duty to follow the state’s instructions when required.
The Sunday Times previously revealed that more than 100 British companies count the Chinese state as a shareholder. There is no suggestion of wrongdoing by these companies.
In 2023 the newspaper’s China List found that UK assets held by the Chinese state totalled £45 billion and the sum held overall by Chinese and Hong Kong investors was £152 billion.
But where have Chinese firms got a foothold in the UK?
Nuclear
China has had key roles in proposals to expand Britain’s nuclear capacity in recent years.
China General Nuclear Corporation (CGN) was an investor in Hinkley Point C but it halted its funding in 2023 and therefore its stake has been receding.
It also held a 20 per cent stake in the proposed Sizewell C nuclear site in Suffolk, but the government paid the company more than £100 million to remove it from the scheme.
CGN remains a lead developer in plans for the Bradwell B nuclear plant in Essex, but little progress has been made.
Utilities
The China Investment Company, a state-owned investment firm, has a 10.5 per cent stake in the National Grid’s gas distribution network and also holds an 8.7 per cent share of Thames Water.
It also has stakes in Cadent Gas, and China’s sovereign wealth fund owns 49 per cent of Neptune, which supplies about 1.5 million homes from Cygnus, the UK’s largest gasfield, which is in the North Sea about 100 miles off the Lincolnshire coast.
CK Hutchison, a firm that the China Strategic Risks Institute says is close to the state, also owns stakes in UK Power Networks, Seabank Power Station, Northumbrian Water, Wales & West Utilities and Northern Gas Networks Limited.
CIC also holds a stake of about 10 per cent in Heathrow.
Universities
The Times previously revealed that more than 40 British universities had collaborated with institutions that have been linked to malign activities of the Chinese state.
Many of the agreements are with Chinese universities that pose no risk. But over five years, 42 had arrangements with institutions that are considered a cause for concern, the Australian Strategic Policy Institute, a defence think tank, said.
In 22 cases the British universities held partnerships with institutions deemed “very high risk” by the policy institute because of deep links with the Chinese state and its military.
Solar
Britain aims to ramp up the use of solar panels. However, 80 per cent of the global solar manufacturing market is owned by China. This includes both the finished panels and the raw materials needed to make them.
Britain has almost no domestic manufacturing capacity and so imports of the technology from China cost hundreds of millions of pounds a year. It was previously reported that MI5 was helping to establish the extent to which the use of Chinese technology such as solar panels or industrial batteries could pose potential future security threats.
Wind farms
Analysis by The Times has found that Chinese businesses have funded or provided parts for at least 14 of the 50 British offshore wind farm projects in operation or late in development. Companies owned by the Chinese government have large stakes in three of the projects, which combined produce enough energy to power up to two million homes.
Earlier this year MPs clashed in the Commons over proposals for the privately owned Chinese company Mingyang to supply wind turbines for a planned floating offshore wind project in Scottish waters called Green Volt.
Telecommunications
Huawei was removed from Britain’s 5G network in 2020. However, new fears were raised over a merger last year between Vodafone and Three. The China Strategic Risks Institute warned in December that the merger would “add to a growing list of major stakes held by PRC firms in the UK’s Critical National Infrastructure” due to the involvement of CK Hutchison.
Household items
The next frontier where concerns have been raised is household items that use cellular communications made in China. Devices such as smart meters, mobile payment terminals or electric cars all transmit data and are theoretically controllable or disruptable.
The cross-party Coalition on Secure Technology has warned that three Chinese companies are responsible for more than 50 per cent of the global market in cellular modules used in the growing network of interconnected devices.
