China Audit

Judith Cummins Excerpts

Tuesday 24th June 2025 Commons Chamber

[The Secretary of State for Foreign, Commonwealth and Development Affairs (Mr David Lammy)]

With permission, I will make a statement on the China audit.

China’s rise has shaped the geopolitical landscape. Over the past decade, its military expenditure doubled. Its armed forces became the world’s largest. It established dominance over critical mineral supply chains. It pursued relentless innovation in electric vehicles, artificial intelligence and even space travel. Over the same period, China has delivered a third of global economic growth, becoming the world’s second largest economy and, together with Hong Kong, the UK’s third largest trading partner.

Not engaging with China is therefore no choice at all. China’s power is an inescapable fact. After what the Intelligence and Security Committee in 2023 described as a “completely inadequate” approach over the past decade to deal with China’s “size, ambition and capability”, we must now look at the facts. Lord Cameron of Chipping Norton attempted a golden era. Boris Johnson let Huawei into our critical national infrastructure before U-turning. Liz Truss and Rishi Sunak decided that China was a threat but failed to devise any policy response, instead burying their heads in the sand.

This Government conducted an audit of our most complex bilateral relationship to deliver a long-term strategy, moving beyond cheap rhetoric to a data-driven, cross-Government approach. I would like to thank the hundreds who contributed to it, including hon. Members, of course, and experts, businesses, diaspora communities, devolved Governments and close allies. The audit is less a single act than an ongoing exercise that will continue to guide the UK’s approach to China. It informed the Government’s strategic defence review, which assessed that China was a “sophisticated and persistent challenge”. It informed the national security strategy, published today, which sets out China’s impacts on each strategic pillar of UK national security. It has steered our trade and industrial strategies, which analysed where greater engagement is possible, given the important role China can play in delivering UK growth.

Hon. Members will understand that much of the audit was conducted at a high classification and that most of the detail is not disclosable without damaging our national interests. I am therefore providing a broad summary of its recommendations today in a manner consistent with that of our Five Eyes partners. On security, the audit described a full spectrum of threats, from espionage and cyber-attacks to the repression of Hongkongers and attacks on the rules-based order. It made clear that our protections must extend more widely than they currently do—from the security of this House to our critical national infrastructure.

Hon. Members will again recognise that disclosing the detail of the responses to those threats would undermine their effectiveness. However, I can confirm that following the audit we are investing £600 million in our intelligence services; updating our state threats legislation following Jonathan Hall’s review; strengthening our response to transnational repression; introducing training for police and launching more online guidance to support victims; launching, as announced in the industrial strategy, a 12-week consultation on updating the definitions covering the 17 sensitive areas under the National Security and Investment Act 2021; and working bilaterally with China to enhance intelligence flows related to illicit finance specifically, organised immigration crime and scam centres, using new National Crime Agency capabilities.

On global security, the audit underlined the extent of Beijing’s support for the Kremlin. The Government have already tripled the number of Chinese entities sanctioned for equipping Russia’s illegal war, and we will continue to confront that.

The audit reiterated that our approach to China must stay rooted in both international law and deterrence. We will continue to confront China’s dangerous and destabilising activity in the South China sea, which I saw for myself when I visited the Philippines. We will continue to work with our regional partners to support freedom of navigation and call out China’s abuses. We will double down on AUKUS. We will not change our long-standing position on Taiwan, while sustaining unofficial but vibrant ties with Taiwan on trade, education and innovation. We will also never shy away from shining a spotlight on human rights—notably the situations in Xinjiang and Tibet—while on Hong Kong we will insist that China honours its commitments under the Sino-British joint declaration, including by repealing the national security law and releasing Jimmy Lai.

The audit made it clear that our approach will always be guided by the UK’s long-term economic growth priorities. It provided ample evidence of the extent to which our economies are intertwined. China is our third biggest trading partner and our universities’ second largest source of international students. China will continue to play a vital role in supporting the UK’s secure growth, but over the past decade we have not had the structures either to take the opportunities or to protect us from the risks that those deep links demand. Businesses have told us time and again that they have lacked senior political engagement and adequate Government guidance.

We have already begun to develop new structures, including regular economic and financial dialogues with my right hon. Friend the Chancellor, setting us on course to unlock £1 billion of economic value for the UK economy and positioning the UK’s world-leading financial sector to reflect China’s importance to the global economy; joint economic and trade commissions; and joint commission meetings on science. We will also launch a new online hub, bringing together detailed and specific business advice. The forthcoming trade strategy will set out how we will support British firms to enhance links with China’s vast and growing consumer market as well as assess new tools to keep goods made by forced labour anywhere in the world off Britain’s high streets.

The audit recognised that China’s global role does not fit into simple stereotypes. China is the world’s biggest emitter but also the biggest producer of renewables. It offers $80 billion towards development annually. It is also the UK’s second largest research collaborator: 11% of British research output included Chinese authors.

So the audit was clear: the UK must develop new dialogues with China on issues such as climate, development, global health and science, as well as on trade. In doing so, we are driving our long-term interests and creating secure opportunities for UK plc.

We cannot deal with China’s complexity unless we improve our capability to understand it, for our national security and for secure trade and growth. The audit showed that under the last Government there was a profound lack of confidence in how to deal with China and a profound lack of knowledge regarding China’s culture, history and—most importantly—language. Over the past year, I have found that far too few mandarins speak Mandarin. We are already taking action to address that by introducing a new China fast stream in the Foreign, Commonwealth and Development Office, creating an FCDO global China network and training over 1,000 civil servants on China policy in the past year. Enhancing those capabilities still further will be a core focus for the £290 million FCDO transformation fund announced in the national security strategy by my right hon. Friend the Chancellor of the Duchy of Lancaster a short time ago. The new strategy, which proceeds from the audit, will ensure that the Government examine the full spectrum of interests in their decision-making processes and deliver the consistent approach that was so sorely lacking.

Anyone expecting a simple prescription on China is not living in the real world. The audit has painted a complex picture, but it has provided us with a clear way forward. The UK’s approach to China will be founded on progressive realism, taking the world as it is, not as we would wish it to be. Like our closest allies, we will co-operate where we can and challenge where we must. Never compromising on our national security, recognising the complexity of the world as it is, engaging confidently, carefully and pragmatically, and delivering secure growth—those are the hallmarks of grown-up government, acting in the long-term national interest.

[Madam Deputy Speaker (Judith Cummins)]

I call the shadow Foreign Secretary.

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[Mr Lammy]

I know that the right hon. Lady can be pretty brazen, but a lecture from her about China policy should make even her blush. The Conservative party oversaw more than a decade of division, inconsistency and complacency towards China. There was no strategy, there was no plan and there was no sense of a national interest. The Intelligence and Security Committee, which was chaired by the right hon. Member for New Forest East (Sir Julian Lewis), from her party, said that the actions on China had left Britain “severely handicapped” in managing our future security. The truth is that the right hon. Lady was at the centre of it.

Where was she during the ill-judged Cameron-Osborne golden age? She was the Minister for the Treasury. Where was she during the humiliating Huawei U-turn? She was Home Secretary. The Tories had their heads in the sand. Under them, Britain’s defences were weakened and our armed services hollowed out. It is a Labour Government who are investing £600 million in our intelligence services to deal with those threats; it is a Labour Government who are investing £290 million extra a year in our diplomatic capabilities in this area; it is a Labour Government who are delivering the biggest increase in defence spending since the cold war; and it is a Labour Government who are making Britain secure at home and strong abroad.

I refer the right hon. Lady to page 28 of the strategic defence review—she clearly has not bothered to read it—which makes it clear that we of course understand that China is a “sophisticated and persistent” threat. She talks about the embassy, but she should know, as a former Home Secretary, that it is a quasi-judicial decision that has been properly made by the Secretary of State for Housing, Communities and Local Government.

The right hon. Lady talks about Jimmy Lai. I met Sebastien Lai last week, and we have been raising the issue on every single occasion. A trial is ongoing, so let us see how it will complete. She raises transnational aggression. We are the ones updating our state threats legislation because the Conservatives left the gaps and did nothing when in power. She raises the situation in Russia and the Chinese supplying Russia with dual-use goods. Who has done the sanctions? There have been five rounds of sanctions under me as Foreign Secretary. What did the Conservatives do? I will take no lectures on this subject from them, who know that, as a Government, they were found wanting on the question of threats from the Chinese.

[Madam Deputy Speaker (Judith Cummins)]

I call the Chair of the Foreign Affairs Committee.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

Our relationship with China is most definitely a difficult one. On the one hand, it is our third biggest trading partner, but on the other hand, the national security strategy, on page 35, says that there is an increase in espionage, China is undermining our economic security and interfering in our democracy, and that has increased over recent years. The Foreign Office needs to hold the ring.

The China audit needs to be wide-ranging. It is an important piece of work. We were looking forward to seeing it published and to the Foreign Secretary coming to talk to us—he said that he would—but instead we are looking through a glass darkly, we do not know and we will not be able to see it. We want to be able to do our job properly and scrutinise this important piece of work. May I therefore suggest that the Foreign Secretary makes available a reading room at the FCDO for Foreign Affairs Committee members and staff before his appearance on 8 July so that we can study the audit properly and hold him to account?

[Mr Lammy]

I am grateful to my right hon. Friend for the interest that she has taken with the China audit. I did say that I would update the Committee, and I look forward to appearing before it and taking questions on this subject.

In completing the audit, it has been important to remain consistent with our Five Eyes partners. She will recognise why much of the audit has led to a high level of classification. She will note, when she looks across the G7 and other Five Eyes partners, that many of them have handled their approach to China in the way that I have set out. I refer her to the strategic defence review and its contents on China. I refer her to the national security strategy, which has just been published, and its references to China. I also refer her to the UK’s industrial strategy and its references to China, alongside the statement that I have just made.

[Madam Deputy Speaker]

I call the Liberal Democrat spokesperson.

[Calum Miller (Bicester and Woodstock) (LD)]

I thank the Foreign Secretary for advance sight of his statement. For years, UK Governments have failed to take seriously the challenge posed by China. The Conservatives failed to deliver even the semblance of a coherent approach to dealing with Beijing. Today, after months of waiting for this audit, the Government’s failure to publish a stand-alone document is immensely disappointing. Will the Foreign Secretary set out how Members of this House, including those on the Intelligence and Security Committee and those on the Front Benches with responsibility for foreign affairs, defence and security, can be briefed on the more sensitive elements of the audit?

We on the Liberal Democrat Benches recognise China for what it is: a threat to our values and interests. The Foreign Secretary is right that our approach must confront the facts as they are. They include China’s hostility to the UK’s allies and support for our adversaries, its abuse of human rights in Xinjiang and Hong Kong, the theft of intellectual property and its efforts at transnational repression. Instead of trying to establish warm relations with President Xi, the Government should commit to clear red lines on what they will not accept. For example, we have yet to receive a satisfactory explanation for why my hon. Friend the Member for Bath (Wera Hobhouse) was denied entry to Hong Kong when on a private visit to see her family. Will the Foreign Secretary confirm what steps he will take if Beijing refuses to give an assurance that MPs will not be blocked from visiting Hong Kong or China?

We now hear reports that the Deputy Prime Minister is preparing to wave through Beijing’s application for a proposed mega-embassy in the heart of London. That is not a technical planning matter to be cloaked in the veil of quasi-judicial powers; it is a matter of national security. Opposition has been expressed by the United States and by pro-democracy Chinese and Hong Kong activists living in the UK, who already face Chinese Communist party-sponsored bounties. Has the Foreign Secretary met those activists, and will he formally request that the mega-embassy application be blocked?

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[Several hon. Members rose—]

[Madam Deputy Speaker (Judith Cummins)]

Order. Members will be aware that we have three debates this afternoon, so I aim to finish this statement by 2.35 pm.

[Louise Jones (North East Derbyshire) (Lab)]

May I say to the Foreign Secretary how much I welcome this China audit? I would like to highlight one aspect in particular. As someone who studied Chinese at university and lived there for a year, I know how complex and different China can be, and the many misconceptions and ignorance around China have been a source of frustration for me. Whatever anybody thinks of our relationship with China, it is absolutely vital that we have clear communication and that we deal with China from a position of knowledge. Does the Foreign Secretary agree how important it is that the FCDO is upskilled to ensure that we have that knowledge of Chinese culture and language skills, so we are fully prepared for the years ahead?

[Mr Lammy]

My hon. Friend’s question goes to the heart of capabilities. We must have more diplomats with a fine understanding of China and more Mandarin speakers, and we are doing that. Sadly, the last Government cut the number of diplomats with that capability and understanding. We need to invest in the Great Britain-China Centre so that understanding of the culture is across our country, and she is absolutely right on that point.

[Madam Deputy Speaker]

Order. I also remind Members that it would be helpful to have short questions and answers.

[David Reed (Exmouth and Exeter East) (Con)]

On the one hand, the Defence Secretary has told the world that the UK will increase offensive cyber operations against China. On the other hand, the Deputy Prime Minister is pushing for a Chinese super-embassy in London, which will be furnished with secret data cabling. Does the Foreign Secretary see any inconsistencies in his Government’s approach to China?

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[Several hon. Members rose—]

[Madam Deputy Speaker (Judith Cummins)]

For an example of a quick question, I call Sir Desmond Swayne.

[Sir Desmond Swayne (New Forest West) (Con)]

It was proper and lawful to send HMS Spey through the Taiwan strait in pursuit of vital international freedom of navigation in the South China sea, was it not, and can we see more like it?

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[Mr Lammy]

The hon. Gentleman has put his views on the record, and I will consult my officials about what he has revealed.

[Madam Deputy Speaker (Judith Cummins)]

I call Jim Shannon to ask the final question.

[Jim Shannon (Strangford) (DUP)]

I thank the Foreign Secretary for his statement. It is essential that we have a fuller understanding of the reach of China, as well as of our goals. British citizens have contacted me about the human rights violations, not only against those in China but those who live on our shores. Will the Foreign Secretary ensure that China understands that its reach stops before our shores, and that our people are entitled to think and have freedom of speech whenever they desire, without any fear of reprisal?