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Business and Trade Committee

Oral evidence: China and the UK economy, HC 124

Tuesday 9 June 2026

Ordered by the House of Commons to be published on 9 June 2026.

Watch the meeting

Members present: Liam Byrne (Chair); Chris Bloore; John Cooper; Sarah Edwards; Leigh Ingham; Justin Madders; Charlie Maynard; Mr Joshua Reynolds.

Questions 237 - 253

Witnesses

 


Examination of witnesses

Witnesses: Professor Christopher Smith, Ben Moore and Sam Dunning.

Q237   Chair: Welcome to the second panel of today’s hearing on UK-China economic relations. Thank you so much to our witnesses for bearing with us as the last panel overran.

Professor Smith, maybe I could start with you. Which are the areas of frontier science in which China now leads compared with the UK? Are there any fields of science now where the UK is ahead of China, or is China now basically ahead of us in pretty much everything?

Professor Smith: Thank you very much. It is a pleasure to be here.

This is slightly complicated by the fact that if you go at a very macro level, and say something like quantum, you end up with a strange sort of answer, because we actually need to think more carefully about the stack. There are places where we have spectacular success in the stack. We are doing really great work—that was announced yesterday by Secretary of State Liz Kendall—on chips and so on and so forth, where we have particular niches of expertise. In order to give a proper answer, you would have to go down to quite a granular level.

Clearly, if you go to a very macro level, there are expenditures in things like AI, quantum, semiconductors and telecommunications where there is a global advantage in the very large players—America and China are outspending the rest of the world very substantially, in a unified way. I am going to say this, because I may not get the chance to say this at another point: there are places, in terms of culture, languages, social sciences and so on, where we continue to have very great strength, and we can show that there are parts of the creative industries where we are doing extremely well, but I don’t think that is the focus of your concern.

My answer would be: at a granular level, we can constantly find places where we succeed and do the best in the world; at a macro level, it is difficult to compete with very large global powers like America and China.

Q238   Chair: Let me put the question in slightly sharper terms, then. If I am running, say, the Government Office for Science, and I am looking at some of the frontier science that might be important to our leadership in, let’s say, industrial strategy or other fields of global challenges, are there particular niche areas of science where the UK is ahead, or is the basic picture that China is now further ahead than us?

Professor Smith: UKRI is the non-governmental public body that is responsible for delivering R&D in the industrial strategy. If you look very specifically at the industrial strategy, we have a series of predominantly eight to 10 areas where we are focused.

Our job at the moment is precisely to work out those areas where we already have strategic advantage and to invest in those. They are grouped under headings like AI, quantum, semiconductors, life sciences, engineering and biology, but we will be looking for the specific programmes where we do have an edge; we have particular areas in quantum and defence, such as quantum position and navigation technology. We are doing some very interesting work on digital security by design, which is an old product of the industrial strategy challenge fund that we are carrying forward. At the moment, we are working through some deep analysis of where that investment would be best, both at low TRLs for research and high TRLs for innovation.

My answer is, yes, there are areas where we are succeeding. The picture will always change. This is a dynamic world; the industries that we are talking about are not standing still, so we are in a constant recalibration of our areas. We are doing extremely well in some places, but that will be at granular level. To say, “Are we winning on AI?” is not going to work. But are we winning in a particular set of applications, or are we winning in a particular niche? There we can find areas of success.

Q239   Chair: How easy is it, then, for British scientists to stay at the leading edge of scientific advance without working with China?

Professor Smith: I am trying to resist reframing your question, but I think “working with” is interesting here. Is it possible to do this without being aware of what is happening globally? Absolutely not; no scientist can possibly sit in a box and ignore everything that is happening around them. It would be a rare scientist now who can produce something out of their hat. Being aware of what is happening is absolutely essential for scientific progress.

That is a kind of “working with”. It is not quite the same as deep partnership with a shared grant, etc. I guess I would say something like this: the ability of the UK to succeed depends on knowledge, through open science and through attentiveness, of what is happening globally. There will be areas where it is extremely important for us to work together because there is a mutual advantage—for example, on One Health pandemic areas we have been doing some great work together. You can see tremendous success in citation patterns for co-authored papers in certain areas.

You are absolutely right to imply that there are going to be areas where it will be difficult for us and for any country or scientist because the work is specifically held secretly—it is closed science, and we have closed science, as well as other countries—so we do not know whether we are at an equivalent stage, or where we are choosing not to collaborate because that would mean potentially sharing IP where we do not wish to on particular areas.

The other question is whether it is possible for us to achieve in separation. That will very much be on a case-by-case basis. Scientists do extraordinary things. We have other partners; we can partner with Europe or the United States. There is a challenge here. It is very easy to portray the science outcome as some kind of final discovery that moves one forward an enormous distance. There are a lot of incremental moves forward and all of us are in that race.

Q240   Chair: For many years, you have operated a funding framework that is basically about funding success. If, next door, we passed a law next week that said, “Thou shalt no longer work with China, Chinese scientists in China or Chinese-funded science,” what would be the impact on British science at the leading edge?

Professor Smith: I think it would be negative because you would be doing a uniquely strange act of refusing to permit the flow of ideas. In an open-science world, it would actually be extremely difficult to achieve.

If you define that legislation in terms of there being certain areas where it would be preferable for us not to collaborate, or indeed forbidden for us to do so, then the distinction between that kind of legislation and the JCM that Patrick Vallance led to China, which said, “Here are the preferred areas of collaboration and here are areas where we will not collaborate,” seems to me to be minimal. We can therefore survive in a world of selection and curation. That is absolutely fine. There will be costs to that and there are advantages. If we say, “Never speak to anybody from a particular area of the world again,” it seems to me that there is only loss in that.

Q241   Chair: If we pass that law next week, who are the scientists that would be howling the loudest?

Professor Smith: There are two kinds of scientists who would be howling the loudest. There are those with direct collaborations that are positive. That would include areas of health and areas that we have described in the JCM. There are areas of climate change, planetary science and agricultural technology where there are positive advantages which we have outlined and which Government have taken on and those would be concerned.

I think that there would also be a concern from all of us who believe that open science is an important principle—as open as possible, as closed as necessary. There is a principle there as well. However, that principle does not mean that you do anything with anybody. I think there is a principled version and there are specific niches where there has been positive collaboration.

Chair: That is really helpful. Thank you.

Q242   Chris Bloore: Sam, I want to talk about the risks associated with collaboration with China, particularly on national, economic and data security. I know that is a lot to cover, but could you give us your viewpoints on the risks of those collaborations?

Sam Dunning: There are some acute risks. We are currently involved in a proxy war with Russia and there is a degree of technological co-operation between Russia and China. To give you an example to make this concrete, it was reported by Reuters the other day that Russia is sending military personnel to China for training in the use of drones—UAVs. As we know, that is technology that is transforming war, and we are seeing that in Ukraine.

I have in front of me a list of recent dual-use or military-use papers on co-ordinating drone swarms and so on where there is a co-author at a British institution and another co-author at a Chinese defence institution. These papers are very easy to find. That is just to say that there are acute risks. If we find that our university ecosystem is supporting military-use research into drones and working with Chinese entities on that, and then China is working with Russia on that—I do not have to spell it out.

There is then a whole set of broader structural questions. You talk about economic security, and I am going to answer this with reference to your thought experiment. If we passed a law tomorrow and obviously, we have not specified what kind of law that would be—

Chair: It would be really draconian.

Sam Dunning: Okay. I absolutely echo what was said by my colleague, Professor Smith, about how open science works and how basically catastrophic and unprecedented it would be if it were very draconian indeed, but I want to bring together the point about economic security and competition outside of the military domain, where there are these acute risks, with that question. You say, “British science”. We have procured and published the official Higher Education Statistics Agency data about the nationality of postgraduate scientists in our elite institutions. I have the graphs here. I am sorry it has come out rather small, but you see a red line and a blue line showing British versus Chinese nationals studying STEM at postgrad in our top five STEM universities: Cambridge, Oxford, Imperial, UCL and Edinburgh. Last year’s data shows that for the first time there are more Chinese nationals than British here. Not many people appreciate that, but if you look at engineering—somewhere I have another graph—we are looking at a picture of domination. There are far more Chinese nationals than British.

We have not defined your draconian law, but what is British science really? It is a serious question because many of those people will want to work in a very free way with Chinese institutions. Those kinds of deep phenomena have evolved without there having been a strategic decision to make this happen in the sector. It has happened, but we are not thinking through the strategic ramifications. To bring it back to economic security, what are the incentives working on Chinese nationals in the UK, if they are part of a team that is developing some interesting IP? They are thinking—

Q243   Chair: Can I just come back to the threat that this poses? At the top of your answer, you illustrated in a really effective way the risks of diffusion of dual use to our adversaries. What are the other perils that you would point to? The risk that you have just highlighted is a big one, but are there others?

Sam Dunning: When we are in a situation of deep integration and we do not really understand who we are integrated with, then we are in a position of disadvantage. That is one thing.

The other thing is that we need to talk about the competitive deficit. If you are thinking, “I’ve got my IP in my team, I want to start a start-up,” and you are a Chinese national, are you going to go to China, where electricity is 10 times cheaper and where planning is much more straightforward, or are you going to do that in the UK? When we are considering the integration in the higher education research ecosystem of China and the UK, and then all these comparative advantages and disadvantages, in terms of electricity prices and planning but also information, do we really understand who we are in business with? Can you go and sue for an IP breach in China, if you are Oxford University? There is a real imbalance, so the economic security risk is potentially quite fundamental.

Chair: To dig into that, I call Mr Madders.

Q244   Justin Madders: When the researchers or the various institutions are looking to collaborate with Chinese counterparts, how robust is the decision-making process? What sorts of threats and trade-offs are being considered? Is it consistent? This is probably one for you, Ben.

Ben Moore: That is a fantastic question. At the macro level, since 2019 there has been a real step change in the way we make decisions about partnering with China. That was when NPSA, which is the part of MI5 that looks after critical infrastructure, launched its protected research campaign called “Trusted Research”.

We work incredibly closely, specifically with a unit within DSIT called the research collaboration advice team, a dedicated unit whose sole responsibility it is to give universities advice about how you identify and manage risks in your international partnerships. As you can imagine, a lot of that conversation will revolve around China, given that it exhibits some of the risks that Sam and colleagues have spoken about already.

On a practical level, what does it look like? What are universities doing? There is deep vetting of partnership proposals now, and you have more regular ongoing monitoring of proposals.

Q245   Chair: At the university level?

Ben Moore: At the university level. Universities will do their own due diligence; they will be using software, and some of them will be navigating the Chinese internet to see whether someone has military links—an organisation or an individual. If they believe that there is a risk of dual use or if the individual is military-linked, they can then speak to the RCAT, which I have just spoken about. They can speak to the security services and ask, “Have you any more information about this individual or organisation? Have you any advice for us on how to mitigate some of these risks to proceed?”

If they think it is risky, most universities now have either a China risk group or an international risk group. The people doing the due diligence are experts and practitioners; they will escalate that to senior management, and then senior management will take a view on what the benefit of that partnership is. That will be subjective, but it will be about what the science is trying to achieve and then what the risks are, in terms of dual use, the university’s values, the risk of IP theft and the risks to individuals. Those are incredibly complex decisions to make, and that is why we dock in with the Government and security services. But we must not shy away from making those decisions; it is incredibly important that we do that. There is that robust architecture.

The final thing to say on the dual-use and military point is that this a heavily regulated area. Those partnerships should go through the export control regime, being military and dual-use technologies going to China. If Chinese investors want to invest in university spin-outs, and if that investment is significant, they must go through the National Security and Investment Act. If Chinese research PhD students or staff want to come to a British university and undertake any STEM research, including in veterinary science, they must first receive clearance from the FCDO, which undertakes security vetting, drawing on cross-Whitehall sources. This is an incredibly regulated space. We are also doing our part independently, but very closely with Government.

Q246   Justin Madders: We have heard some suggestions that the pace of decision making in various levels of Government is quite slow. Would you say that they are coming to conclusions in a good enough timeframe?

Ben Moore: No. It is inconsistent, but on average it is slower than we would like. We do not mind being told no by the Government when we ask them for permission to work with China, so long as it is evidence based. We just want to get there quickly. There was an example where large British corporations were sponsoring university research. That research relied on two Chinese PhD students who were apparently the only people in the world who could contribute to it. The Government took over six months to come back to say yes or no on whether they could be recruited, and the partner withdrew from the partnership.

From talking to Government, I understand that the issue is that they do not have enough scientific experts to make the complex decisions, so they are waiting for the scientific experts to become available to make a decision. How to attract and retain scientific expertise in Government is a very complex area, but it seems crucial if we are to have a strategic approach to China and a quick regulatory framework.

Q247   Justin Madders: That is very helpful. We have also been conducting an inquiry into AI. Dame Wendy Hall came to give evidence, and she expressed a view about when she has looked to use some open AI models from China. I will not put words in her mouth, but I think she said that the regime was quite restrictive in terms of what she could and could not use. Would you recognise that criticism, and do you think it is a fair one?

Ben Moore: Sorry, but do you mean restrictions on the China side or on the UK side?

Justin Madders: On the UK side.

Ben Moore: I am not an AI expert, to be honest, so I cannot comment on that—my apologies.

Justin Madders: I think this was in an academic environment.

Ben Moore: So the situation is that she has imported an AI model and there have been restrictions placed by the UK Government on what she can use?

Justin Madders: Yes.

Ben Moore: That will be on a bespoke case-by-case basis. Most of this is on a bespoke case-by-case basis, so rather than saying that there are red lines around certain technologies like AI or those within the quantum stack, we look at activity on a case-by-case basis. I am not sure who gave her that advice, but it was probably someone in either the security services or a Government Department.

Q248   Charlie Maynard: I am just trying to reconcile Sam and Ben’s statements. Sam is essentially saying, “I have a list of co-operation,” and the fact that we have more Chinese PhDs doing STEM than UK students also gives universities quite an incentive to be nice, in order to keep having those students come over, because they pay the bills. Ben, you are saying, “We are on top of it and it’s all good. Yes, it’s a bit slow sometimes, but it more or less works out.” I am not looking for a dog fight, but if either of you could pull that apart a bit, that would be appreciated.

Sam Dunning: I think Ben would agree that it is about the difference between an institutional partnership—where money is changing hands, there is an MOU and it goes through RCAT—and the grassroots level, where, informally, an academic based in a British institution is collaborating with colleagues in China. I am sure that Chris can give more of a sense of all the spaces in between, but that is basically the distinction. There is no contradiction.

Q249   Chair: Professor Smith, there must be fuzzy lines around that kind of interaction. Scientists are quite entrepreneurial people.

Professor Smith: If one hypothesises about how one arrives at a grant application, one sits down and does some thinking and preparation. There is an ecosystem of connections, and the most difficult thing for any relationship in a research situation is for an institution to know who is talking to whom at an early stage of the development of an idea.

As has been described, institutions are much more careful now at training their staff and raising awareness of the risks of tracking those relationships. It would be very interesting to see what the list of papers looks like in a decade’s time, and the impact of the heightened awareness that we are seeing, partly because of the work of your organisation and others that are drawing attention to it.

There will always be relationships at the beginning that need to be regulated over time. By the time you get to putting in a grant, UKRI has a whole series of questions and procedures and so on, which should be filtering out at an earlier stage of submission of the application, at the point of peer review, or subsequently as the project develops any particular issues.

Chair: I am going to move us on quite quickly now, because a vote is almost upon us, at which point I will conclude the session.

Q250   Mr Reynolds: I suppose this question is for Sam. How effective do you think the current risk mitigation measures are that the UK Government have in place when it comes to some of this transfer?

Sam Dunning: In terms of the acute risks in military-related research?

Mr Reynolds: Military-related research, and generally.

Chair: The risks that you are most worried about.

Sam Dunning: As Ben said, this is a very regulated space now. We have tracked the amount of spending and the amount of staff for these institutions, such as RCAT, ECJU and the investment security unit in the Cabinet Office. It is all growing, so it is a heavily regulated space. Some of the things that used to happen—such as Manchester or Imperial being involved in huge, multimillion programmes, where the Chinese partner is the Chinese military—do not happen any more.

Q251   Mr Reynolds: So that doesn’t happen any more, but as we know, it might go via an entity, then go via another entity and get there in the end. Do you think that that is still prevalent?

Sam Dunning: How would you regulate a Chinese PhD who wants to co-author a paper with a friend of his in China? Or it might be a British national. It tends to be Chinese nationals, from what we see—we will produce some research on this—but it might be a British national. How do you regulate that?

This relates to the last question that was brought up. Ben had an answer to that that seems rather important; if he would like to contribute, he might have another part of the answer.

Chair: You are being invited to respond, Ben.

Ben Moore: On academic partnerships, Sam is absolutely right that a massive risk is academics collaborating with a Chinese partner, but there is no university oversight. One of the main priorities for our universities in the last three years has been to address that. Mandatory training is going into departmental meetings on a monthly basis just to remind everyone how you identify risk, and what you do when you do identify that, which is largely tell the university partnership.

There are a few things from the Government that can really help. We are trying to drive culture change. One of the barriers is that at the “Hollywood” academic level, with a person who has brought in millions of pounds into an institution over time, they will say, “Give us real-world examples of this going wrong,” in terms of threats being realised on economic security and research security. At the moment, our toolkit is anonymised, hypothetical US case studies. We have been asking the Government to declassify examples for a while—even to anonymise them. We still do not have those.

There is another thing that could really help us. In Canada they have a research security fund. The challenge in the UK is that university finances are increasingly under strain, at the same time that the research security risks are increasing in complexity and scale. That makes it difficult for us to keep pace with investing in cyber-security and with investing in the teams that are going out to speak to the academics. Canada has recognised this and has given its university ringfenced funding that they have to spend on managing risk and international partnership. It seems remiss that we do not have that in the UK. It could be transformative here.

Chair: Transformative?

Ben Moore: It could be transformative; it has been transformative in Canada. They have gone from one person working on this to having Mandarin experts who have open-source intelligence capability so that they can go, as you said, not just to who you are working with but to who the subsidiary is, who owns that and who owns that. It is difficult to do that at scale in the UK because we have smaller teams.

We should not be lagging behind countries like Canada. We are talking about a modest investment of about £100 million over three or four years. That could really make a real difference here.

Q252   Chair: Professor Smith, do you agree with that?

Professor Smith: There are differences between the Canadian system and the UK system in terms of the number of universities and the scale.

Let’s work this through. There are pressures on universities, but this is an absolute obligation—so, a prioritisation issue. Secondly, I think we are improving Mandarin knowledge and so on at the moment; there is a process whereby that can be spread out over time. Having an exact imitation of the Canadian model might be less useful than having a conversation about how we achieve the same outcomes.

The other thing is that we need to be careful about creating burdensome regulation that has a knock-on effect—the challenge about speed, which is raised on the one hand, being exacerbated by introducing more regulation on the other hand.

I agree completely with Ben that we need to continue to mature the ecosystem that is developing. Sam is also right that that ecosystem is also already growing. What I would urge is that we continue to establish the kinds of relationships that are appropriate for the UK’s position, rather than just borrowing from another.

Chair: Let’s turn to Ms Edwards to wrap up, just in case the Division bell goes.

Q253   Sarah Edwards: You have probably answered a lot of what I was going to ask about additional measures, but I will ask anyway. I just want to add a caveat: sometimes there is an assumption in these conversations that all Chinese students who come over to study are somehow directly linked to the state or to espionage. I do not think you are saying that, but it is important that we acknowledge that point in this session, because they contribute a lot to research, innovation and all the rest of it.

You have mentioned these already, but obviously we have the export controls. It is extremely regulated at the moment. Is there anything else that could be done, beyond the National Security Act or the approvals and vetting schemes? Is there anything that you feel is missing and that you might suggest?

Chair: This is “wish list for the Government” time.

Professor Smith: The most useful thing for us at the moment is to take the JCM’s recommendations in key areas where we should collaborate with confidence, to allow us to invest in those with all due caveats. What would be unhelpful for the system would be if we make the progress that we have made to identify key areas where we can collaborate but then not invest in it—to constantly be going backwards and forwards on that line. We need a little bit of consistency. We had a very good JCM; let us build on that.

Sam Dunning: My organisation, UK-China Transparency, tries not to recommend policy too strongly. However, where it is a matter of more research, more information or more knowledge being needed, we are happy to do that. Understanding Chinese scientists in this country, in terms of their career trajectories, would be really useful. There have been some amazing studies on this in the US, for example. Are people going back to China? Are they going into industry? Are they going into the continuing and higher education sector? Understanding that would be very useful.

There are also some existing rules that are not being enforced properly. One thing I would like to draw your attention to is CCP membership. There are probably about 1,000 CCP members, at least, working for British universities. This is not like being a member of a British political party: it involves enforced secrecy, a requirement to inform on people, an oath and a disciplinary system that enforces all that. It should be on registers of interests. There are potential conflicts of interest in lots of situations. It is not that you want to kick all these people out; that is not the point, but it is really an interest. I think there needs to be a conversation, not just in the higher education sector, but—we can talk about this another day—in the City and elsewhere.

Chair: One approach to that is foreign influence registration.

Sam Dunning: Arguably, but it may not be quite the right one. We have existing processes for conflicts of interest, registers of interests, declarations and management of interests in every industry and every sector. It is there; it does not need to be FIRS, necessarily, although there is that too.

Chair: That is helpful to clarify. Is there anything else on your list, Mr Dunning?

Sam Dunning: We could do more to engage with Chinese scientists in the UK. If you talk to people who are on campuses, they often talk about social and cultural isolation, and it is a real shame.

I will give you one quick anecdote. I spoke to someone who was born in the UK, but who speaks Mandarin and Cantonese. He is an engineering student; I cannot remember whether at master’s or PhD level. He will try to make friends with the Chinese nationals born in China who are studying on his course and, because he does not have an accent in Mandarin, they will say, “Oh, where were you born?” He will say “London,” and they will realise that he is a British person—he told me this—and start blanking him. This is about student experience, but it can also go some way to mitigating the issues that can be generated in terms of that informational, social and cultural gap. Universities could think a bit more about how they can engage these communities more.

Chair: Okay. Mr Moore?

Ben Moore: The flagship funding that Chris articulated would be incredibly helpful, as would a research security fund and adequate resource for the regulatory system. I would include RCAT in that; I think it is a bit stretched at the moment because of the volume of engagement that universities have with it.

The one thing that we have not touched on is that there is a dynamic at the moment where sometimes the Government will say, “No, you can’t accept this Chinese investment or Chinese activity.” Some of our universities report that, when that happens, that piece of research gets left on the shelf because no domestic investor steps in to commercialise it. That seems like a job half done. That is “Block, secure.” In those instances, surely there should be formal mechanisms, or a requirement for the Government to consider funding that, to unlock the potential for the British people.

I understand that this has come out of a defence and protective security mindset, first and foremost, but the next step in the evolution of this is that if something is too risky to export it to China or wherever it may be, the Government should be all over that and should consider funding it. That does not exist at the moment.

Chair: Great point.

This has been an incredibly illuminating session, so thank you very much indeed. What we are trying to do here is understand how the state makes trade-offs. It feels as if enormous progress has been made in this space over the last few years—much more progress than perhaps in other sectors, on which we have heard some evidence today. If you have any further reflections after this panel that you think we should reflect on before we draft our recommendations, we would be very grateful for them.