China’s influence over UK supply chains a major security risk
China’s substantial influence over UK supply chains is a major and overlooked risk to national security, new research has revealed.
The UK is vulnerable to a hostile China through direct trade links and through trading with third countries in which China holds sway, according to a soon-to-be-released study by The Evenstar Institute, a think tank focusing on the evolving nature of national influence in the 21st century.
“The United Kingdom’s national security supply chain is exposed to China in three ways: directly, indirectly (through third countries), and through China’s strong position in the global logistics chain,” the paper’s authors write. “Beijing has repeatedly used its influence in trade and its control over certain raw materials to achieve its own strategic and political aims, for example through cutting off supply to countries which it disagrees with. There is every reason to suspect that Beijing would employ similar tactics to achieve its strategic aims if relations with the UK were to significantly deteriorate.”
The research cites examples of China using trade as a strategic weapon, notably through coal imports from Australia and sand exports to Taiwan. Chinese trade suspensions often target foods, as bans can be plausibly blamed on the presence of pests, thus avoiding retaliation.
The paper finds that the degree of UK integration in supply chains influenced by China makes the UK susceptible to similar economic leverage. Its recommendation is for “both the UK government and the private sector [to] broaden and accelerate reviews into the degree of direct exposure they have to China, as well as examining their indirect and logistics exposure.”
The research comes in the wake of Rishi Sunak declaring an end to the golden era of relations with China, as he accused Beijing of sliding into “ever greater authoritarianism”.
In his speech at the Lord Mayor’s Banquet on Monday night, the Prime Minister drew a line between his tougher approach on China and that of his predecessors, saying that Beijing’s crackdown on Covid protests showed that closer economic ties had failed to bring about political change.
Yet despite the change in tone, Sunak faces tough questions about the extent of Chinese influence in Britain, most notably in higher education and the sale of British strategic assets to Chinese firms.
Evenstar’s analysis comes in the run-up to the Price of War conference, a symposium on conflict economics, in London on 1 December.
Russia’s invasion has turned the established global order on its head, and there is an urgent need for a constructive debate about how decision-makers should best navigate this uncertain environment.
Professor Peter Frankopan, Merryn Somerset Webb, Evenstar’s Sam Olsen, and Martin Wolf are among the world-renowned academics, financial experts, business leaders and commentators gathering at the exclusive event, co-hosted by CERGE-EI and Reaction.
If you’re interested in attending, please email: development@cerge-ei-foundation.org