On a brisk November morning in 2025, the United Kingdom found itself at the center of an intensifying global debate over how to balance economic opportunity with national security. According to an extensive investigation by BBC Panorama, China has poured approximately £45 billion ($59 billion) into British businesses and projects since the turn of the century. While some of these investments have been purely commercial, others—particularly those in high-tech sectors—have given China access to military-grade technology, raising alarms in intelligence and political circles alike.
This surge in Chinese investment reached its apex after a 2015 directive from Beijing, part of the ambitious "Made In China 2025" plan. The strategy, as detailed by BBC, was nothing if not bold: China’s leaders laid out a blueprint for global dominance in ten high-tech fields, including aerospace, electric vehicles, and robotics. AidData, a US-based research group that tracks government spending overseas, revealed that the UK became the top G7 destination for these investments, relative to the size of its population and economy.
Dr. Brad Parks, AidData’s executive director, told BBC Panorama that while some Chinese investments were straightforward business deals, others were tightly aligned with Beijing’s strategic objectives. “It’s the longer-term strategic thinking that China has always had, and I’d argue that many other countries also should have,” added Professor Keyu Jin of the Hong Kong University of Science and Technology, emphasizing China’s ability to set and pursue multi-decade goals.
Yet, not everyone shares this admiration for China’s strategic foresight—especially when national security is at stake. One of the most illustrative cases is that of Imagination Technologies, a Hertfordshire-based firm specializing in semiconductor design. In 2017, after losing its biggest client, Apple, and seeing its share price tumble, Imagination was acquired for £550 million by Canyon Bridge, a private equity firm with Chinese state-linked investors. The fund’s sole investor was Yitai Capital, whose largest stakeholder is China Reform, an entity reporting directly to the State Council—the executive branch of China’s government.
Ron Black, Imagination’s former CEO, recounted to BBC Panorama the mounting pressure he faced after the acquisition. “I think [the China Reform representative] said specifically 'from the heads of the British engineers to the Chinese engineers, then lay off the British engineers and you'll make a lot of money',” Black recalled. He refused to cooperate, but soon after, China Reform attempted to install four new directors on Imagination’s board—directors who, according to Black, had “no understanding of semiconductors” but clear ties to China Reform.
Black’s concerns revolved around the potential military applications of Imagination’s intellectual property—algorithms and chip designs that, while developed for commercial use, could be repurposed for missiles and drones. When he raised these fears with UK government contacts, he was told it was a private industry matter and little could be done. Black eventually resigned, but only after the UK government began to take notice and China Reform halted its boardroom maneuvers. He later won an employment tribunal ruling for unfair dismissal, but the technology he fought to protect was ultimately transferred to China.
Imagination Technologies maintains that its technology is not used in military products, telling BBC Panorama: “Imagination has always complied with applicable export and trade compliance laws in respect of its commercial licensing of semiconductor IP technology and related transactions.” Canyon Bridge, for its part, insisted that the acquisition was “sourced and led exclusively by Canyon Bridge and its advisers.” China Reform declined to comment on Black’s allegations, while the Chinese Embassy stated that Chinese enterprises abroad “strictly comply with local laws and regulations” and contribute to local economies.
But the Imagination saga is just one chapter in a much broader story. Across the Atlantic, the White House has turned up the heat on Chinese tech giant Alibaba, accusing it of providing technical support to the People’s Liberation Army (PLA) for operations targeting the US. In a national security memo cited by the Financial Times, the Biden administration alleged that Alibaba supplied the PLA with access to extensive customer data—including IP addresses, WiFi information, and payment records—and various AI-related services. Alibaba forcefully denied the allegations, calling them “complete nonsense” and an attempt to malign the company.
These concerns are not limited to cloud services or AI. The US Office of the Director of National Intelligence has warned that China is capable of compromising American infrastructure in ways that could be exploited during a conflict. Earlier this year, a US threat assessment described a sweeping Chinese cyber campaign against American telecom networks, dubbed Salt Typhoon, as evidence of the “growing breadth and depth” of Chinese cyber capabilities. A US official told the Financial Times that the administration “takes these threats very seriously and is working day and night to mitigate the ongoing and potential risks and effects from [cyber] intrusions that use untrusted vendors.”
Some US lawmakers have called for even more drastic measures. John Moolenaar, chair of the House China committee, argued, “The federal government and industry must take steps to protect the American people and eliminate Chinese companies’ access to our markets and innovation.” In May, Moolenaar and other legislators urged the Securities and Exchange Commission to delist 25 Chinese companies—including Alibaba—over concerns about military ties and China’s “military-civil fusion” policy, which requires companies to share technology with the armed forces.
Back in the UK, the debate continues over how to manage the economic benefits of Chinese investment without compromising national security. Sir Jeremy Fleming, a former head of GCHQ, told BBC Panorama, “My personal view is that we have been far too free in allowing access to strategically important industries in science and technology.” He contrasted the UK’s openness with China’s tightly controlled approach, noting, “They have been very strategic and careful not to allow Western companies to invest or to get involved in key bits of their industry which are strategically important.”
The UK has since tightened its investment screening regime, following the lead of the US, Germany, and Italy. Yet, as Chancellor Rachel Reeves seeks fresh investment from Beijing to spur economic growth, some Labour MPs are pressing for greater transparency. Dame Emily Thornberry, chair of the House of Commons Foreign Affairs Committee, voiced frustration that the government’s promised China audit remains unpublished due to security concerns. The Foreign Office maintains it is committed to supporting UK businesses to “trade securely” and will use its powers to protect national interests.
As the world grapples with the challenges posed by China’s rise, the UK’s experience serves as a cautionary tale about the complexities of global investment in an era where the lines between commerce and security are increasingly blurred. The question of how to engage with China—reaping economic rewards while safeguarding national interests—remains as urgent and unresolved as ever.
