Aerospace companies struggling because of the pandemic could be snapped up by Beijing to gain access to their technology and boost its military buildup, MPs are warning.
Chinese attempts to gain control of “financially fragile” aerospace companies hit by the downturn in civil air travel should be investigated by the Ministry of Defence, the Commons defence committee says in a report published today.
Nine British companies that supply the defence ministry, or allied forces, with military kit and components have already been bought by Beijing, the report says. These include companies supplying parts for the RAF’s F-35B Lightning stealth fighters and the A400M Atlas transport planes, as well as companies involved in space technology and the manufacture of drones.
Ministry policies over the past 30 years to attract finvestment to the defence industry have led to its seeing this as “an acceptable risk”. But the MPs say foreign investment in the sector should be restricted to companies from Nato countries and other allies.
The committee also warns that venture capital funds “represent an avenue for hostile foreign investors to gain entry into the UK defence supply chain”.
The MPs call on Ben Wallace, the defence secretary, to draw up a list of hostile countries that should be banned from investing in the UK’s defence supply chain and name China and Russia as the main threats.
The Ministry of Defence said: “We carefully monitor foreign investments in the UK’s defence supply chain and undertake rigorous assessments when considering their potential risks to national security.
“The National Security and Investment Bill [which is going through parliament] is intended to enhance the government’s powers to screen and, where necessary, intervene.”
