Will the FBI and MI5’s Joint Warning of China as a ‘Growing Threat’ be Ignored?

The intelligence arm heads of MI5 Director-General Ken McCallum and FBI Director Chris Wray warned about the growing long-term threat presented by the Chinese Communist Party (CCP) to the interests of the United Kingdom and the US, in their first joint appearance. 

“We’re doing so to send the clearest signal we can on a massive shared challenge: China,” said McCallum.

According to McCallum, the objective of the address is not to “cut off” diplomatic relations with China, as the United Kingdom is interested in engaging China in sectors where this can be done without compromising their public safety or founding principles.

“First, the aim here is not to cut off from China – one fifth of humanity, with immense talent. China is central to global issues: economic growth, public health, climate change. There are situations where the risks are sharper – and you’d expect the head of MI5 to focus on those. But even then, our aim is to make conscious choices on issues that are rarely binary. We want a UK which is both connected and resilient,” he added.

The FBI and MI5 have warned that Chinese industrial espionage poses an increasingly serious threat to western companies https://t.co/OdWnkOCBBv

— Financial Times (@FinancialTimes) July 7, 2022

“We’re doing so to send the clearest signal we can on a massive shared challenge: China,” said McCallum.

According to McCallum, the objective of the address is not to “cut off” diplomatic relations with China, as the United Kingdom is interested in engaging China in sectors where this can be done without compromising their public safety or founding principles.

“First, the aim here is not to cut off from China – one fifth of humanity, with immense talent. China is central to global issues: economic growth, public health, climate change,” he said.

“There are situations where the risks are sharper – and you’d expect the head of MI5 to focus on those. But even then, our aim is to make conscious choices on issues that are rarely binary. We want a UK which is both connected and resilient,” he added.

‘Potential risks’

When President Xi first took office, McCallum indicated that he had started early in his tenure that China “must research asymmetrical steps to catch up and overtake” in core technological areas. It would be otherwise impossible for China to catch up with the West by 2050 unless they took “asymmetrical steps.” The scope of the endeavor is expansive. There was not much of a mystery surrounding it. The goal may be seen in various publicly available strategic plans, such as “Made in China 2025.”

As per MI5, this translates to climbing on top of your head to get one step “ahead of you.” This implies that if you work in cutting-edge technology, artificial intelligence, advanced research, or product development, there is a strong likelihood that the CCP is keen on the knowledge you have to contribute. 

Whether you already have a footprint in the Chinese market or are attempting to establish one there, you should be prepared for greater scrutiny than you might anticipate. McCallum has referred to it as “the biggest wealth transfer in human history.” MI5 teams have observed that the CCP seeks to secure an added benefit for the UK in various ways.

One of the potential risks stated by MI5 is the “tech transfer.” He said, 

“Clandestine espionage methodology isn’t always necessary. Take the tale of Smith’s Harlow, a UK-based precision engineering firm. In 2017 Smith’s Harlow entered into a deal with a Chinese firm, Futures Aerospace. The first of three agreed technology transfers saw Futures pay £3m for quality control procedures and training courses.”

“You know how this ends: after further sharing of valuable IP, Futures abandoned the deal. As a result, Smith’s Harlow went into administration in 2020. As their chairman put it: ‘They’ve taken what they wanted, and now they’ve got it, they didn’t need the shell of Smith’s,'” he added.

Following McCallum’s general direction, Wray warned American companies to exercise extreme caution when conducting business with Chinese enterprises. This is especially important as Chinese companies and the Chinese government have witnessed the repercussions that sanctions have had on Russia due to its invasion of Ukraine on February 24.

He stated that the Chinese government is taking steps to protect itself from potential economic consequences if they attack Taiwan.

Wray threatened China’s potential intentions to use military force to seize control of Taiwan, stating that such an event “would represent one of the most horrific business disruptions the world has ever seen.”

The heads of intelligence agencies have issued a request for increased collaboration to combat impending dangers.

According to McCallum, the United Kingdom has shared information about cyber threats with 37 countries. He also stated that security alliances such as the Five Eyes, which includes the United States of America, Canada, New Zealand, the United Kingdom, and Australia, “remain at the heart of our response.”

The Chinese Intervention

Increasing affluence in China and expanding “connectivity” with the West did not immediately lead to more political freedom. On the contrary, as stated by McCallum, the CCP is interested in its democratic, media, and legal institutions, not to replicate them but to exploit them for its “gain.”

“The motive behind Chinese intelligence service cultivation of Westerners is primarily to make “friends”: once a “friendship” is formed [they] will use the relationship to obtain information which is not legally or commercially available to China and to promote China’s interest. Cultivation of contact of interest is likely to develop slowly: [they] are very patient. … The aim of these tactics is to create a debt of obligation on the part of the target, who will eventually find it difficult to refuse inevitable requests for favours in return,”

Establishing ‘National Resilience’

One element they have included in the address is a government-funded, stepped-up security and intelligence response. For example, MI5 has increased its campaign against Chinese concerns, with seven more investigations than in 2018.

“We plan to grow as much again, while also maintaining significant effort against Russian and Iranian covert threats,” he said.