China: Human Rights and Security

Lord Fox Excerpts

Thursday 19th December 2024 Lords Chamber

[Lord Fox (LD)]

My Lords, like others, I thank the noble Lord, Lord Alton, for securing this debate. Unlike others, I also praise him for the propitious timing that he managed to secure for this debate. We will leave this as the last message of the year.

We have already heard important speeches on human rights, and I am sure that we will hear more. As the noble Lord, Lord Alton, intimated, I want to change gear. I want to take a, let us say, secular approach, perhaps a utilitarian approach, to the issue of technology and the threat of Chinese technology to our security. I will use the specific to illustrate the general.

My first specific is lidar: light detection and ranging technology. It is used for mapping and sensing in autonomous vehicles, drones, trains and airports; and utility providers and infrastructure operators use lidar to monitor pipelines, power lines and rail networks. As your Lordships will understand, these are all important areas. In 2020, Chinese firms had a 58% share of the global automotive lidar market. I do not have later stats, but I expect that the share will now have risen due to the copious use of subsidies, market protections, procurement preference and the systematic acquisition of foreign intellectual property. Chinese lidar poses a danger because it collects sensitive data and can receive over-the-air updates enabling potentially undetectable changes to systems, which could compromise operation.

Next, we have cellular IoT—internet of things—modules. These are what connect everything to the internet. They are used in a vast array of critical infrastructure applications: energy, logistics, manufacturing, transport, health, and security, to name but some. They remotely monitor and control complex systems and collect vast amounts of data and metadata for analysis, processing and response management. Chinese pricing is often up to 25% below manufacturing cost, helping China to gain a 70% share of the world market—already. Quite apart from the leverage that can be applied via this dominant position, China has potential access to very large amounts of data and can remotely interfere with devices, switching off or degrading critical national infrastructure.

Domination of key markets is a Chinese strategy across many technologies. Photovoltaics is one example, and China’s share of all manufacturing stages for solar panels exceeds 80%. Once again, this has happened by the use of very low price levels that are supported by subsidy, with China having crushed most of its international opposition.

Lithium-ion batteries are another example. China dominates the whole battery supply chain, producing well over 80% of all key components. Graphite, copper, nickel and cobalt are the raw materials needed for batteries and their use will rise staggeringly. For example, by 2040, estimates point to a ninefold increase in lithium requirements above current use. While US and European companies play significant roles in some areas of lithium and copper asset ownership, China invested $10 billion in overseas mining in the first half of 2023 alone. China dominates nickel and cobalt production, notably in Indonesia and Congo, and it controls 93% of battery-grade graphite refining.

Rare earth minerals, vital for manufacturing not just batteries but wind turbines, phone displays and fibre-optic cables, will see a surge in demand. Again, China dominates refining and production, and is expected to increase its share above the current 80%. In AI and quantum computing, the Chinese effort is currently somewhat behind that of the US and the West, but we have already seen that if China decides to move forward, it moves forward at pace. Chips are key to this and China continues to grow its domestic chip industry: a $47.5 billion investment fund was announced this year, and the West has been slow to respond. Delays applying sanctions allowed China to buy time and stockpile, while an increase in its chip purchases now indicates that it is still stockpiling for future problems.

Meanwhile, quantum computing has the potential to completely change the way our computers and devices work, and poses significant security risks. At the moment, China and the US lead, but China is certainly further ahead in moves to try to deploy this technology, with infrastructure and two satellites with quantum communication capability.

Thanks to the tireless work of some of the people speaking in this debate, the last Government began to wake up to the dangers. In October 2022, work started on removing Huawei from UK telecoms infrastructure, but this is due to be completed only in 2027, and there have been partial moves regarding Hikvision’s surveillance cameras, but not even scratching the surface of this problem. Where is our co-ordinated approach to this? The pattern in the UK is piecemeal, slow and, I would say, largely ineffective.

To conclude, this is not paranoia: the danger is there and the Government need to be honest in their audit. China has a predatory pricing strategy based on massive subsidies, and sometimes slave labour, designed to eliminate its western rivals. It has acquired global dominance in key raw materials and their processing. It has launched programmes to gather IP from across the world by any means, as we heard from the noble and learned Lord, Lord Garnier. Perhaps most worryingly, it has established deep penetration of our critical infrastructure and key equipment, with the capacity for detailed covert surveillance and remote control. This is not the half of it, as we heard from the noble Baroness, Lady Lawlor. It is clear to all who look that China’s technology strategy is a serious threat to our security and an existential threat to our capacity to deliver manufacturing when we need it. I ask the Minister to confirm that she too recognises this threat and that the audit will take this on board.

--- Later in debate ---

[The Parliamentary Under-Secretary of State, Foreign, Commonwealth and Development Office (Baroness Chapman of Darlington) (Lab)]

My Lords, I convey my gratitude to the noble Lord, Lord Alton, for securing this debate. I pay tribute to his work on China, as vice-chair of the Hong Kong APPG and as a member of the APPG on Uighurs. I thank all noble Lords for their insightful contributions to this, the last debate of 2024. The quality of the contributions has been first class, as might be expected.

Across the board, the Government are clear that the UK’s approach to China means co-operating, where we can, on issues such as net zero, as the noble Baroness, Lady Bennett, said, and, as some said, on health and trade. It means that we compete where our interests differ—I will say a little more about that later—and that we challenge, as we have to, where that is what we must do to protect our national security, as many noble Lords have asked us to say, but also our values, as has rightly been said.

As the noble Lord, Lord Purvis, indicated, we need to reset and recalibrate our relationship with China, as we do with the EU, and to be a full and active participant in the CPTPP. All these things are closely interconnected, but we also need a relationship with China that is consistent and long term—and, yes, one that is pragmatic and rooted in UK and global interests.

The noble Lord, Lord Purvis, suggested that we need to be clear-eyed about this at all times. Whether it is on stopping Russia’s illegal invasion of Ukraine or tackling the causes of climate change, there will be times when we have to speak candidly and robustly not just on areas of co-operation in the UK’s national interest but on areas of contention as well.

The noble Baroness, Lady Bennett, made the important point that our concerns about Chinese state activity should not be interpreted as extending to the Chinese people themselves, and I thank her for that. As the world’s second-largest economy, our fourth-largest trading partner and a major economic power that is the largest driver of global growth this decade, we are not going to—and should not try to—ignore China. We must recognise that China, including Hong Kong, presents significant opportunities for growth that can benefit Britain and help other countries grow their economies right around the world.

In pursuit of these opportunities and a renewed partnership, we must be clear-sighted and honest—not shying away from difficult discussions over practices that harm the sort of secure and resilient growth we want to see, and, where our wider values do not align, making that absolutely clear. In doing so, we must build a platform for a relationship that works squarely in our national interest, helps grow our economy sustainably and makes working people in every corner of Britain better off, while rightly putting our national security and resilience first, recognising that the UK-China relationship exists in an increasingly challenging and unstable geopolitical context.

We recognise the importance of the UK’s robust export control system. We will continue to make sure that it has an impact. We continue to use the powers that we have through the National Security and Investment Act to scrutinise investments and other acquisitions, no matter where they come from, and to intervene where that is what is needed to protect our national security.

Of course, the UK and China share many interests—including helping the world achieve a just transition to green energy, as well as our economic links—yet we have significant differences, including on democratic values and freedoms, on Hong Kong and on Russia’s war in Ukraine, where Chinese companies continue to supply significant quantities of dual-use goods and components to Russia. So we must recognise that the UK and China by no means always agree. As a responsible global player, we must engage frankly where we have different perspectives and co-operate where that is possible.

That is why it was important for the Prime Minister to meet President Xi at the G20—the first leader-to-leader meeting in six years—and why it was right both for the Foreign Secretary to visit China in October and for my colleague, the Minister for the Indo-Pacific, to visit Hong Kong last month. As noble Lords know, we are examining the UK’s interests with respect to China through the Government’s China audit, in order to improve our understanding of the challenges and opportunities posed by China and to meet them more effectively.

I was asked about FIRS. I can say today that we have not yet made any decisions on which foreign-power and foreign power-controlled entities will be subject to the enhanced tier. The foreign influence registration scheme will further strengthen our national security while maintaining the UK as an international hub for business. Announcements will be made in due course; I knew I would have to say that at some point today.

The noble Lord, Lord Ahmad, asked about the China audit, including whether I might undertake to facilitate the engagement of the House. I would be happy to do that at the appropriate time. I join the noble Lord and others in their call for the removal of sanctions on parliamentarians. These measures are wrong and should end immediately.

We have a long, shared history with Hong Kong, and, like others, I have family links. My grandfather and father lived there while the first airport was being built. We have strong links between people and strong links on trade. I pay tribute to the work of the noble Lord, Lord Alton, and others over many years. We are now, as many have said, 40 years on from the signing of the joint declaration. We will always stand up for the people of Hong Kong and we remain committed to Hong Kong’s future as an open, dynamic and vibrant city.

The noble and learned Lord, Lord Garnier, and others correctly highlighted the situation in Hong Kong. Like him, we are deeply concerned to see the erosion of the rights and freedoms of Hong Kongers following China’s imposition of the national security law in 2020. The noble Lord, Lord Alton, asked me about the activists. The recent sentencing of the 45 pro-democracy activists is another demonstration of the Hong Kong authorities’ use of the national security law to criminalise political dissent. Those sentenced were exercising their rights to freedom of speech, assembly and political participation. These rights are guaranteed under the International Covenant on Civil and Political Rights of basic law.

The Jimmy Lai case remains of deepest concern. The noble Lord, Lord Alton, the noble and learned Lord, Lord Garnier, and many others spoke movingly on his behalf and I thank them for that. He should be released. He is a British national. He stood up for freedom and it is vital that he is released. It is a priority for the Government and we raise it at every opportunity that we can. In response to the noble Lord, Lord Callanan, I say that the UK will of course continue to call on the Hong Kong authorities to end their politically motivated prosecution. We will continue to seek consular access for Jimmy Lai, including to enable us to verify his health and welfare. I assure noble Lords that UK diplomats in Hong Kong continue to attend Jimmy Lai’s court proceedings—as they should.

The noble Lord, Lord Alton, asked about British nationals named in the trial and he is right to highlight this. All I can say is that attempts by foreign Governments to coerce or intimidate through the mechanism of this trial and to harm critics overseas are completely unacceptable and, just like the trial itself, they should stop.

I share the concerns that many speakers have raised on human rights in China. Across China, people face restrictions and violations of human rights and other fundamental freedoms. As the right reverend Prelate the Bishop of Guildford explained powerfully, in Xinjiang China continues to persecute and arbitrarily detain Uighurs and other predominantly Muslim minorities.

We raise these concerns with the Chinese Government when we can. The Prime Minister and the Foreign Secretary raised human rights with their counterparts, President Xi and Foreign Minister Wang. I am glad that they have been able to have those meetings in order to raise those concerns. I know that Members opposite will say, “But you haven’t got a solution to this yet; nothing has changed”. I do not think that one single engagement gets you that. It is about consistency, continuing to raise issues and being firm in our beliefs and articulating those beliefs at every opportunity we get.

The Government conduct independent visits to areas of major concern whenever possible, and we are supporting NGOs in exposing and reacting to human rights violations. We will continue to co-ordinate efforts with our international partners, which is why we joined Australia’s statement on Xinjiang and Tibet on 22 October at the UN General Assembly. We also joined the US’s statement on Xinjiang at the human rights court on 24 September.

The noble Lord, Lord Callanan, asked about sanctions. He will know what I am about to say. We do not comment on designations ahead of time for reasons that he will understand, but I thank him for raising that none the less.

The noble Lord, Lord Alton, was right to raise our eradication of the use of forced labour in global supply chains. The noble Baroness, Lady Smith, made a really thoughtful and well-informed speech about this. No company in the UK should have forced labour in its supply chain; it just should not.

The approach we are taking is that the Government will work with businesses and international partners, so that they properly understand what they need to do to combat forced labour so that they have an impact in tackling this. We understand that it is all very well making statements but we want to see the impact. We have been working closely with business to make sure that we achieve that.

I commit to discussing Chinese student associations with the Security Minister at the earliest opportunity.

As the noble Lord, Lord Alton, said, China’s repression of the people of Tibet is utterly unacceptable, as it restricts freedom of religion or belief and the right to assemble and associate freely. The Government stand firm on human rights, and we champion freedom of religion or belief for all. We recently appointed our FoRB envoy, and we wish him well in his work. We champion this both in our bilateral relations with China and through the UN, the G7 and other multilateral groups.

Members of this House are familiar with recent tensions in the Taiwan Strait. Our long-standing position, and that of the previous Government, remains that this issue should and must be resolved peacefully by people on both sides of the strait, without the threat or the use of force or coercion. Peace and stability in the strait matter immensely, for not just the UK but the wider world. As we outlined in a statement in October, recent Chinese military exercises around Taiwan increase tensions and risk dangerous escalation.

I thank the noble Baroness, Lady D’Souza, for the helpful suggestions in her speech, particularly on language training for officials, which she was right to raise. I assure her that that is happening.

A conflict across the strait would be a tragedy for the people there, and it would be devastating for the wider global economy. I am glad that the noble Lord, Lord Alton, reminded the House of a study by Bloomberg Economics at the start of 2024, which estimated that it could cost the global economy some $10 trillion—roughly 10% of global GDP. That is why the UK does not support any unilateral attempt to change the status quo across the Taiwan Strait, and we have made our views on this clear to China. We are working with our partners to make sure that they are doing the same.

The noble Baroness, Lady Smith, raised an interesting point about polar regions. China has an interest in natural resource exploitation. Increasingly, China is attempting to undermine existing protections and multilateral co-operation, such as through the Antarctic Treaty, to further its own interests. Its increasing use of the Northern Sea Route as a transportation link poses threats to this pristine environment. We think that there is a risk here if this is mishandled.

The Foreign Secretary set out the UK’s concerns over China’s aggressive activity in the South China Sea in conversations with the Chinese Government during his visit to China in October. The UK is committed to international law, to the primacy of the United Nations Convention on the Law of the Sea, and to freedom of navigation in and overflight of the South China Sea. We take no sides in sovereignty disputes, but we oppose any action that raises tensions or the risk of miscalculation.

The speeches of the noble Baroness, Lady D’Souza, and the noble Lord, Lord Fox, focused on technology—they were both interesting and sobering. We will continue to work on improving this country’s cyber protections.

Critical minerals are a really important point. We will shortly publish a UK critical minerals strategy, because our energy security depends on it, frankly, and it is the responsible thing to do. But I take the important point of the noble Lord, Lord Purvis, about how we must not be seen to lecture partner nations on whom they should and should not do business with. We are a good partner when it comes to extractive industries: we work responsibly, environmentally and with the local workforce in country. We would like to be more strategic in our thinking about this—so, when that strategy is published, I look forward to the response of the noble Lord, Lord Fox, in particular.

[Lord Fox (LD)]

Try to stop me.

[Baroness Chapman of Darlington (Lab)]

Indeed—I think that was an invitation that I did not need to make.

Lastly, I underline that this Government’s re-engagement with China aims to enable a consistent, long-term and pragmatic relationship through which we can pursue the UK’s interests on security and growth. We will challenge and compete where that is the right thing to do, and the smart thing to do, and we will be ambitious on areas of co-operation. That is our duty to the British people and as a responsible global actor, and that is at the heart of our commitment to re-engage, including through the long-overdue leader-level meeting, the Foreign Secretary’s successful visit to China and the Minister for the Indo-Pacific’s visit to Hong Kong. Indeed, in the new year my right honourable friend the Chancellor plans to visit China as well.

In all our engagement, from the Taiwan Strait and South China Sea, where any escalation, or deterioration in stability, would have a significant impact on UK and global growth, to Hong Kong, to the completely unwarranted and unacceptable sanctions against UK parliamentarians and others, the Prime Minister has set us all a clear direction: to co-operate with China wherever we can, to take action to protect our interests and at all times to stand up for our values.