Spying allegations pose dilemma for UK China policy

The Chinese embassy has asked the UK to “stop creating trouble”, after a businessman accused of being a spy for China was banned from the country.

The revelations about Yang Tengbo, who denies any wrongdoing, and his links to Prince Andrew, have sparked fresh calls for the UK to designate China as a national security threat.

The question poses a dilemma for the government, which hopes to strengthen ties with China to help boost economic growth and solve common problems like climate change.

In the House of Commons on Monday, a number of senior Conservatives called for tougher measures to protect the UK against China's covert influence.

The government is committed to introducing a system for recording foreign influences next summer, after the previous Conservative government legislated to this effect.

This would require individuals and organizations acting on behalf of a foreign power to report any political lobbying.

The system will have two tiers, with countries specified in the “enhanced tier” requiring registration of a wider range of activities “where necessary to protect the security interests of the United Kingdom”.

But its implementation has been delayed, with the measures now due to come into force from next summer.

Former Conservative home secretary Suella Braverman claimed the plan was “ready to go” by the time of July's general election and was among several Conservative MPs to call for China to be placed in the improved level.

Meanwhile, former security minister Tom Tugendhat said MI5 had deemed the project “not worth it” if China was not in the enhanced tier.

Former Conservative leader Sir Iain Duncan Smith, who like Tugendhat was sanctioned by China and is one of the country's most vocal critics, said there should be “no more delay” in implementing work of the project.

He said Mr Yang was not a “lone wolf” but one of thousands who had broken into British institutions.

When the party was in power, conservatives were divided on whether to designate China as a security threat.

Powers to introduce a foreign influence registration system were among laws passed in July 2023, but none had been introduced by the time of the general election a year later.

Speaking on Monday, Security Minister Dan Jarvis insisted the project was not ready when Labor took power and the government now plans to present the regulations to Parliament during the new year, before its launch this summer.

However, he declined to confirm whether China would belong to the enhanced tier, saying only that decisions would be based on “robust security and intelligence analysis.”

Such a move would be likely to provoke a backlash from China, at a time when the British government is seeking to establish more stable relations.

Last month, Sir Keir Starmer met President Xi Jinping on the sidelines of the G20 summit in Rio de Janeiro – the first time a British prime minister has met the Chinese leader in person since 2018.

Chancellor Rachel Reeves is also due to visit Beijing next year to discuss economic cooperation with her Chinese counterpart.

It comes after a period of strained relations between the two countries, with tensions over issues including China's treatment of Xinjiang's Uyghur minority and pro-democracy activists in Hong Kong.

On Monday, Sir Keir said he was “concerned” about the challenge posed by China, but reiterated the government's position that there was a need to cooperate on issues such as trade, climate change and human rights. man.

As one of the UK's largest trading partners, any deterioration in relations with China could impact the government's aim of boosting the country's economic growth.

Banks including HSBC and Standard Chartered have reportedly privately expressed concerns about the potential impact of China's inclusion in the enhanced tier.

According to Bloombergexecutives fear it could hamper business and trigger negative publicity if they are forced to report their activity.

China has strongly denied the spying allegations and accused some lawmakers of trying to “defame” the country.

But on Tuesday, British judges issued another ruling regarding an alleged Chinese agent, Christine Lee, confirm a decision by MI5 to warn that she had infiltrated Parliament.

As a decision looms over whether to designate China as a national security threat, the ongoing row could further damage the UK's attempts to repair relations.