China has financed tens of billions of pounds' worth of investment in UK businesses and projects this century, some of which gave it access to military-grade technology, BBC Panorama has learned.
The spending spree - worth £45bn ($59bn) at 2023 prices - was at its height following a 2015 Chinese state directive, aimed at making the country a global leader in high-tech industries.
The UK has been the top destination among G7 nations for these investments, relative to the size of its population and economy, according to US-based research group AidData.
Panorama has investigated how this led to cutting-edge technology and skills being transferred to China. The UK was "far too free in allowing access to strategically important industries", according to a former head of GCHQ.
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These objectives were laid out by China's communist leaders in a strategic plan 10 years ago, called "Made In China 2025". It set ambitious targets for the country to become the industry leader in 10 high-tech sectors, including aerospace, electric vehicles and robotics.
This was a far-sighted strategy, according to Prof Keyu Jin of Hong Kong University of Science and Technology: "It's the longer-term strategic thinking that China has always had, and I'd argue that many other countries also should have."
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Imagination Technologies, a Hertfordshire-based firm, was one of the companies Panorama looked at.
It specialises in semiconductor design - in other words, designing the tiny electronic circuits inside chips that power devices such as computers and smartphones.
Exterior view of a modern white building with the Imagination Technologies logo on the wall, featuring a stylized circular and square design above the word ‘Imagination.’ Several bollards line the foreground, and parked cars are visible near the entrance.
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In 2017, Imagination had recently lost its most important client, Apple, and had seen its share price fall dramatically. It was snapped up for £550m by a private equity firm, Canyon Bridge, based at that time in the US state of California.
The Canyon Bridge fund that bought Imagination had one investor - Yitai Capital, whose largest stakeholder is China Reform. This organisation reports to the State Council, the body responsible for carrying out party policies and laws.
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In his first interview since leaving Imagination, the company's former CEO, Ron Black, says the UK government vetted the deal, and he was told "unequivocally" by Canyon Bridge that China Reform would be a passive investor, only interested in making money.
However, in 2019, Mr Black says he was summoned to a meeting in Beijing, where he was asked to work directly for China Reform, and oversee the wholesale transfer of Imagination's technology and expertise to China.
"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'," says Mr Black.
He refused, but he says that several months later, China Reform tried to install four new directors "with no understanding of semiconductors" directly onto the board of Imagination Technologies.
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Fearful about the possible transfer of military-grade technology, Mr Black resigned. At that point, he says, the UK government started to take an interest, and China Reform halted its attempt to install new directors.
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In 2017, the UK had fewer powers to stop the sale of a company such as Imagination to Chinese owners. Two years earlier, China's leader, Xi Jinping, had been welcomed on a state visit, with David Cameron's Conservative government hailing the start of a "golden era" in China-UK relations.
"We thought China was basically a very friendly power and there was lots of money to be made," says Sir Jeremy Hunt. In 2015 he was health secretary, and later held other government posts, including chancellor of the exchequer and foreign secretary. "But under the surface, we were beginning to sense a much more assertive China."
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Europe as a whole and some US businesses were naive about China in 2017-18, according to John Bolton, former US national security advisor during the first Trump administration.
"There was a reluctance to think we were slipping back into some kind of Cold War," he says.
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The high point for Chinese overseas investment was during 2016 and 2017, according to Dr Parks. After this point, he says, many countries started strengthening screening mechanisms on national security grounds.
The US, Germany and Italy tightened vetting on foreign investment by 2018. The UK followed suit in 2022.
Sir Jeremy Fleming is cautiously optimistic that lessons have been learned.
"We have a much stronger regime in place," he says. "But would I say the process is watertight? Absolutely not."
In 2024, a Labour government was elected, but it faced the same issue as its Conservative predecessor - namely, that the UK needed economic growth and China could help.
"One big problem in Europe, including the UK, is that there's not enough investment and funding," says Prof Keyu Jin. "China is very happy to finance some of these projects. And there are lots of areas where there's no real threat of national security."
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But some Labour MPs are concerned the government has not published its China audit, which it carried out as part of an election manifesto commitment.
"I was promised by the foreign secretary that it would be published," says Dame Emily Thornberry MP, the chair of the House of Commons Foreign Affairs Committee. "Then we hear that the China audit has happened but we're not going to be told about it, we're only going to get a few lines."
The Foreign Office has told Panorama it did not publish its full audit because of its security classification.
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