The heads of the UK’s MI5 and the US’s Federal Bureau of Investigations (FBI) have raised alarms about Chinese economic espionage in a rare joint address in London.
MI5 Director Ken McCallum said on Wednesday that the Chinese government’s “covert pressure across the globe” amounts to “the most game-changing challenge we face”, while FBI Director Chris Wray warned Western firms that Beijing was determined to steal their technology for competitive gain.
China immediately rejected the accusations as “groundless”, labelling them an attempt to “smear” its political system.
McCallum and Wray’s joint address took place in London’s Thames House, with officials and business executives in attendance.
The Chinese threat “might feel abstract. But it’s real and it’s pressing,” McCallum said. “We need to talk about it. We need to act.”
He said the MI5, the United Kingdom’s domestic intelligence service, had sharply expanded its China-focused operations.
“Today we’re running seven times as many investigations as we were in 2018,” he said. “We plan to grow as much again, while also maintaining significant effort against Russian and Iranian covert threats.”
McCallum said Chinese intelligence takes a slow and patient approach to developing sources and gaining access to information, and few of those targeted recognised themselves as such.
“Hostile activity is happening on UK soil right now,” he said.
“By volume, most of what is at risk from Chinese Communist Party aggression is not, so to speak, my stuff. It’s yours – the world-leading expertise, technology, research and commercial advantage developed and held by people in this room, and others like you.”
The FBI director repeated that message, calling China’s actions a “complex, enduring and pervasive danger” to the United States, the UK, as well as other allies.
Wray said China was “set on stealing your technology, whatever it is that makes your industry tick, and using it to undercut your business and dominate your market”. He also warned that a Chinese invasion of Taiwan, which Beijing views as its territory, would cause “one of the most horrific” disruptions to global commerce and industry.
He said there are signs the Chinese, perhaps drawing lessons from Russia’s experience since the war, have looked for ways to “insulate their economy” against potential sanctions.
“In our world, we call that behaviour a clue,” Wray said, urging caution from Western companies looking to do business in or with China.
In the event of a Chinese invasion of Taiwan, “just as in Russia, Western investments built over years could become hostages, capital stranded [and] supply chains and relationships disrupted,” he said.
Last week, the US government’s director of national intelligence, Avril Haines, said at an event in Washington, DC, that there were no indications that Chinese President Xi Jinping was poised to take Taiwan by military force. But she did say Xi appeared to be “pursuing the potential” for such action as part of a broader Chinese government goal of reunification of Taiwan.
The Chinese embassy in London rejected McCallum and Wray’s accusations, describing them as “completely groundless”.
“The so-called cases they listed are pure shadow chasing,” a spokesperson said in a statement posted on the mission’s website. “They spread all kinds of lies about China in order to smear China’s political system, stoke anti-China and exclusion sentiment, and divert public attention in order to cover up their own infamous deeds.”
The Chinese embassy in Washington, DC, also told the Associated Press news agency in a statement that the Taiwan issue was “purely China’s internal affair”.
“We will strive for the prospect of peaceful reunification with utmost sincerity and efforts,” the statement said, though it noted that China will “reserve the option of taking all necessary measures in response to the interference of foreign forces”.