British Defence Industry Taking ‘Forensic Look’ to Minimise Chinese and Russian Infiltration, Minister Says

Alex Chalk, minister for defence procurement, makes a speech ahead of the first cut of steel for the Royal Navy frigate, HMS Active, at Rosyth Dockyard on the Firth of Forth at Rosyth, Fife, on Jan. 24, 2023. Andrew Milligan/PA

The UK government and defence suppliers are seriously examining the supply chain for Chinese or Russian infiltration such as Chinese surveillance equipment, Defence Procurement minister Alex Chalk said on Monday.

It comes after a recent Mail on Sunday investigation found that at least six army bases had surveillance cameras made by China’s Hikvision or Dahua at their front doors.

Speaking at the ConservativeHome Defence and Security Conference, Chalk said the UK can’t afford to aim for “Gucci weapons” and have a stop-and-start procurement process and “have to move to always-on.”

In terms of procurement, Chalk believes it’s preferable to have 80 percent capability today rather than 100 percent tomorrow “because tomorrow never comes.”

He also warned that the UK risks being overtaken by countries such as France because they procure with exports in mind.

Asked how concerned he is about Chinese infiltration in British technology universities, Chalk said ministers are concerned.

The Ministry of Defence and “every single supplier” are now “applying a forensic look at the supply chain, all the bells and whistles that go into these highly complex weapons, to try to understand provenance and, in particular, the risk of Chinese or indeed Russian infiltration,” Chalk said.

“Also in terms of our infrastructure to satisfy ourselves that there isn’t unsatisfactory Chinese involvement with surveillance and so on. ... That is absolutely taking place, I’m pleased to say,” he said, adding that it’s being taken “extremely seriously” when he met with suppliers such as BAE Systems, Rolls Royce, or Babcock.

Hikvision surveillance cameras outside the Hikvision headquarters in Hangzhou, in east China's Zhejiang province, on May 22, 2019. STR/AFP via Getty Images

Commenting on MP James Sunderland’s view that the UK needs to build and sell the British defence manufacturing industry, Chalk said it’s “critical” to ensure things are built “in a way that assures our pipeline.”

“That does mean sometimes, by the way, that you will have to do what some have refered to as friend shoring, in other words, build these things with friendly allies. But you do have to make sure that the capability which relies on an exquisite weapon, which with a whole lot of Chinese influence in the supply chain, that’s not the path for the future,” he said.

But Professor John Louth, strategic adviser at defence and energy consultancy Redstone Risk, said it’s almost impossible to check everything if coding lines are included.

“A typical systems architecture in defence is about three-and-a-half, four billion lines. To assure that is almost impossible,” he said. “You can assure chunks of system, you can assure how systems talk to systems. But you cannot possibly assure each of those coding lines because you'll kind of have to spend all the defense budget on doing it.”

Defence Industry Becomes ‘Sin Stock’

Questioning the panel, Andrew Kinniburgh, director general at defence trade association Make UK Defence, said the UK is “desperately clinging on” as the second largest defence exporter by using a 10-year rolling average figure.

Kinniburgh said British small and medium tier defence suppliers are facing difficulties as the industry is “being considered almost as a sin stock now ... in the same way as perhaps the tobacco industry.”

“We’ve got numerous examples of companies not being able to lease cars, not be able to get insurance. We’ve had a company last week that has been told their bank account will be withdrawn by a challenger bank. The big high street banks are now saying [if] you’ve got more than 10 percent business in defense, they’re withdrawing services, overdrafts, loans. It’s becoming a growing issue,” Kinniburgh said.

Agreeing that UK defence is “clinging on,” Chalk said the industry being considered sin stock is “a really difficult nut to crack” but he’s committed to advocating for defence manufacturing.

“We have to take this moment to say to invest in munitions, to invest in defense stocks, is to invest in the defence of freedom” to allow people to “live their lives unthreatened, unmenaced by those who believe that might is always right and the international rules based order is some kind of quaint relic from a bygone era,” he said.

“We have to articulate that unashamedly and powerfully and I’m certainly committed to doing so. But ... it will take others to play that part. So that is an ongoing conversation that we should definitely have.”