The panel called for tougher action in UK government's "robust" approach to China.
China's size and ambition has enabled it to successfully penetrate every sector of the UK's economy, an influential parliamentary panel has said, warning that Beijing's national imperative continues to become a technological and economic superpower on which other countries are reliant, which represents the "greatest risk" to the UK.
The House of Commons Intelligence and Security Committee (ISC) said in a wide-ranging report released on Thursday that the intelligence threat posed by China is compounded by a "whole-of-state" approach with the use of state and non-state players for spying.
China's national imperative continues to be the dominance and governance of the Chinese Communist Party (CCP) and at a global level, to become a technological and economic superpower on which other countries are reliant, which represents the "greatest risk" to the UK, it said.
It cautioned that the level of resources dedicated by the UK to tackling the threat posed by China's so-called "whole-of-state" approach has been "completely inadequate".
"China almost certainly maintains the largest state intelligence apparatus in the world - dwarfing the UK's Intelligence Community and presenting a challenge for our agencies to cover," the report notes.
"As a result, our agencies' work has to be targeted on those aspects that are most damaging. However, the problem is compounded by China's 'whole-of-state' approach," it said.
"In practice, this means that Chinese state-owned and non-state-owned companies, as well as academic and cultural establishments and ordinary Chinese citizens, are liable to be (willingly or unwillingly) co-opted into espionage and interference operations overseas: much of the impact that China has on national security is overt - through its economic might, its takeovers and mergers, its interaction with Academia and Industry - as opposed to the covert activity carried out by its intelligence officers," it said.
The ISC review is critical of the UK government approach, which until the pandemic readily accepted Chinese investments.
"China's size, ambition and capability have enabled it to successfully penetrate every sector of the UK's economy, and - until the Covid-19 pandemic - Chinese money was readily accepted by HMG [His Majesty's Government] with few questions asked," it said.
"China's ruthless targeting is not just economic: it is similarly aggressive in its interference activities, which it operates to advance its own interests, values and narrative at the expense of those of the West," it adds.
The ISC called for tougher action in the government's "robust" and "clear-eyed" approach to China, as it found that external experts believe it was singularly failing to deploy a whole-of-government approach when countering the threat from China - "a damning appraisal indeed".
"If the Government is serious about tackling the threat from China, then it needs to ensure that it has its house in order such that security concerns are not constantly trumped by economic interest," the ISC said.
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