China Gained Military-Tech Access Through UK Investments

Published: 17 November 2025 Monday. The English Chronicle Desk. The English Chronicle Online

China’s aggressive investment strategy in the United Kingdom over the past two decades has granted it access to cutting-edge technology with potential military applications, according to a BBC Panorama investigation. The spending spree, worth an estimated £45 billion ($59 billion) at 2023 prices, accelerated after a 2015 Chinese state directive aimed at positioning Beijing as a global leader in high-tech industries.

The UK has emerged as the leading G7 destination for Chinese investments relative to its population and economic size, according to US-based research group AidData. While some of these investments were commercially motivated, others were closely aligned with Beijing’s strategic goals.

“Britain was far too free in allowing access to strategically important industries,” a former head of the Government Communications Headquarters (GCHQ) told Panorama. The investigation highlights how UK companies became conduits for technology and expertise transfer, potentially bolstering China’s military capabilities.

Panorama was given exclusive early access to AidData’s research, which tracks how governments spend money internationally. Dr. Brad Parks, AidData’s executive director, explained that some Chinese investments abroad were deliberately designed to further strategic ambitions outlined in the “Made in China 2025” plan. Launched a decade ago, the plan sought to make China a global leader in ten high-tech sectors, including aerospace, robotics, semiconductors, and electric vehicles.

Professor Keyu Jin of the Hong Kong University of Science and Technology described the strategy as “longer-term, far-sighted thinking” characteristic of China’s planning, adding that other nations could adopt similar approaches to secure strategic industries.

The BBC investigation reveals that some UK investments enabled the transfer of sensitive technologies, including those with military potential. One notable example is Imagination Technologies, a Hertfordshire-based firm specialising in semiconductor design, which is crucial for computer chips used in everything from smartphones to satellites.

By 2017, Imagination Technologies had lost its most important client, Apple, and faced a dramatic drop in share value. The company was acquired for £550 million by Canyon Bridge, a private equity firm registered in California, which had one key investor: Yitai Capital, whose largest stakeholder is China Reform. China Reform reports directly to China’s State Council, the government body responsible for enforcing party policies and law.

Prior to this acquisition, Canyon Bridge had attempted to purchase a semiconductor firm in the United States, but the deal was blocked by US investment-screening laws due to national security concerns. The Imagination purchase, however, proceeded in the UK, highlighting differences in regulatory oversight between the two countries.

The true value of Imagination lay in its intellectual property and the expertise of its engineers, accumulated over decades. While the technology was designed for civilian use, the algorithms behind the chips could also be adapted for military applications, including drones and missile systems.

In his first interview since leaving Imagination, former CEO Ron Black described how the UK government vetted the acquisition, and Canyon Bridge assured him that China Reform would be a passive investor, focused solely on financial returns.

However, Black recounted that in 2019 he was summoned to Beijing, where representatives from China Reform asked him to work directly for the company and oversee the 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,’” Black told Panorama. He refused the request, but a few months later, China Reform attempted to install four new directors on Imagination’s board—none with semiconductor expertise, but with close ties to China Reform.

Believing the company’s technology could be used for military purposes, Black contacted UK government officials. He received sympathetic responses but was told it was largely a private-sector matter, leaving him without effective recourse. Concerned about the potential risks, Black resigned. Shortly afterward, the government began scrutinizing the board appointments, and China Reform paused its efforts. Black withdrew his resignation but was dismissed three days later. He was later vindicated by an employment tribunal, which found his dismissal unfair. Despite these interventions, Imagination’s technology was ultimately transferred to China after his departure.

The Imagination Technologies case illustrates how Chinese investment in UK companies has allowed access to sensitive technologies with potential military applications. While many Chinese-backed deals were legitimate commercial transactions, the alignment of certain acquisitions with Beijing’s strategic goals raises concerns about national security oversight.

“Some of these investments had very clear dual-use potential,” said an industry analyst. “Semiconductors, AI, robotics—these are areas where the same technology can be applied to civilian or military systems. The UK government’s approach in the past has been too permissive, particularly compared with stricter screening regimes in the US.”

Since the revelations, UK officials have signaled a tougher stance on foreign investments in strategic sectors. New legislation and investment-screening powers are being considered to prevent future transfers of sensitive technology, especially in areas critical to national security.

AidData’s research indicates that China has spent tens of billions of pounds in the UK since 2000, financing acquisitions in technology, infrastructure, and industrial sectors. The 2015 state directive accelerated the pace of spending, emphasizing strategic sectors that could enhance China’s global competitiveness.

Dr. Parks noted that not all investments are nefarious, but when government-backed funds are involved, there is a dual purpose: financial returns and strategic advantage. Companies with deep technical expertise in semiconductors, AI, or aerospace may inadvertently transfer knowledge that strengthens China’s technological edge, including capabilities relevant to defense applications.

The Imagination Technologies episode is emblematic of the challenges facing countries like the UK, which must balance openness to foreign investment with the need to safeguard strategic technologies. Analysts argue that lessons from this period will shape how the UK approaches future foreign investments in critical sectors.

The BBC investigation highlights the tension between economic openness and national security. While Chinese investment has provided capital and business opportunities in the UK, it has also underscored the risks of insufficient oversight in sectors that hold strategic value. As governments around the world grapple with the implications of such deals, the Imagination case offers a cautionary tale of how easily civilian technologies can be diverted into areas of national security concern.

The UK is now under pressure to review its screening processes for foreign investment, particularly in high-tech and defense-related industries, to prevent similar transfers in the future. The government’s response will likely influence both international investment flows and national security planning in the coming years.