Executive Summary

The recent political turmoil over the failed prosecution in the UK of two men accused of spying for a senior politician in China has reignited concerns over national security despite broader goals for economic co-operation. We assess that, amidst the background of Brexit, the UK will likely continue to improve trade relations with China as a major importer of renewable energy components, even with contradicting views on human rights abuses and strengthening ties with the US.

That said, in spite of stronger economic and technological ties, Chinese espionage will very likely continue to threaten the UK, given a long history of political meddling and cyber espionage, which is expected to increase after the fears raised by the UK intelligence community about the failed spy case. The proposal of a new Chinese embassy at the Royal Mint, one of Britain’s most prestigious and strategically located buildings in central London, has been met with criticism by international partners over potential counterintelligence risks and will likely increase tension between the UK and its allies if moved forward.

Key Judgements

KJ-1. The UK likely will continue to improve trade relations with China, despite broader conflicts of interest.

1. On 11 January 2025, Chancellor of the Exchequer Rachel Reeves and Chinese Vice Premier He Lifeng agreed to strengthen economic ties, discuss science and technology developments and co-operate on climate change and food security. [source]
2. The UK currently relies on Chinese renewable energy components, including solar panels, wind farms, and electric vehicles, to deliver net zero commitments despite trade-offs in forced labour and national security. [source]
3. The UK-US trade deal in May 2025 provoked a strong reaction from China, which interpreted the move as supporting US efforts to isolate China economically. [source]

KJ-2. Chinese espionage very likely will continue to present a threat to the UK, despite agreed economic and technological co-operation

1. In the last two years, China has surveilled and intimidated UK based Hong-Kong activists, infiltrated parliament social circles and sponsored cyber espionage through the hacking group, Salt Typhoon. The number of investigations into persons relating to state threat activity has increased by 35% compared to last year. [source]
2. In June 2025, Foreign Secretary David Lammy pledged to invest £600m in UK intelligence services as well as increasing support for victims of transnational repression. [source]
3. Head of MI5 Sir Ken McCallum responded to the collapse of a spy case, declaring that China was performing “large scale espionage,” and is “the biggest state-based threat to the country’s economic security.” [source]

KJ-3. The proposed new Chinese embassy in London underscores the global impacts of the UK-China relationship and, if approved, will likely increase political tension between the UK and its partners.

1. UK intelligence agencies have cautioned that the site’s proximity to the City of London and Canary Wharf poses a national security risk. A nearby telephone exchange and fibre-optic cables that connect the two financial hubs are potential targets that can be tapped. [source][source] 
2. The White House and Dutch parliament have raised concerns over the risk of communications interception by the new embassy’s location. [source]
3. The UK government has delayed the approval of the embassy for the third time to 20 January amidst blanked out floor plans, a change of housing secretary, and new advice from the Foreign and Home Office; Beijing’s Ministry of Foreign Affairs blamed the UK for “constantly complicating and politicizing the matter.” [source][source]

Statement on Analysis

We have high confidence in our key judgments, given the quality of sources, including parliamentary debates and an official statement from the MI5. That said, gaps in publicly available information about this issue may cloud our understanding of some aspects. 

We acknowledge that KJ1 rests on the assumption that even a rejection of China’s planned embassy would not shake upward trending trade relations, but our understanding of Beijing’s resolve on this issue and the plans and intention of CCP leadership is limited by a lack of reporting.

KJs 2 and 3 are well founded, beyond the cited data, on Beijing’s strong historical track record of aggressive espionage activity against Five Eyes partners and deep running counterintelligence concerns about China in the intelligence communities of North America and Europe.

Intelligence Cut-off Date: 15 December 2025