IAN WILLIAMS: Ministers blinded by Beijing's cash cannot see their dangerous folly

Daily Mail​

21 hours ago

The warning from America is stark: selling Thames Water, Britain's biggest water and sewage business, to a Chinese company would be a 'national security threat' – or as Sir Iain Duncan Smith, the former Conservative leader, puts it, 'stupidity on stupidity'.
That the Labour government cannot see the dangerous folly of handing China control of the capital's water supply – a necessity for 15 million people – beggar's belief.
It is only four months since the Chinese owner of British Steel was accused of trying to sabotage the company's blast furnaces, potentially to undermine UK production and increase reliance on imports from China. There have been multiple warnings about the need for vigilance in the face of industrial scale Chinese cyber espionage as well as influence operations to undermine our democracy. The world is becoming more dangerous – to a large extent because of China's behaviour.
Yet ministers seem unable or unwilling to see beyond the cash – seemingly oblivious to the risks that come with inviting China into sensitive corners of the economy.
Ministers are reportedly preparing to take struggling Thames Water into temporary public ownership, with Hong Kong-based CK Infrastructure (CKI) a leading contender to then take it over.
CKI already has investments in British firms, including UK Power Networks, Northumberland Water and Northern Gas Networks. It also has a 65 per cent stake in UK Rails, which leases rolling stock to Britain's railway companies. Surely this is reason for caution, especially as relations with China deteriorate and Beijing seeks to exert greater control over CKI's parent company, CK Hutchison Holdings (CKH).
The US government has raised the alarm over CKH, which controls ports at either end of the Panama Canal, because Washington fears the firm could hand China control of the vital waterway. In March, CKH agreed to sell the ports to an American-led consortium, but the deal has effectively been vetoed by Beijing, which has threatened CKH's business interests in China unless it takes on a partner closely linked to the Chinese Communist Party.
CKH is headquartered in Hong Kong, which for a long time was a relatively autonomous place for business, free from the heavy hand of Beijing. No more. Hong Kong is now darkly repressive – as the trial and pending prison sentence of 77-year-old pro-democracy activist Jimmy Lai, a fierce critic of China, will surely attest.
Burner phones and throw-away laptops are commonplace for visiting foreign executives, fearing surveillance. Companies based in the former British colony cannot escape laws that oblige all Chinese firms do the Party's bidding on demand when it comes to issues of 'national security' – an infinitely elastic concept in China.
As Beijing deepens its partnership with Russia, underwriting the Ukraine war, and grows increasingly hostile to the West, its 'Trojan horse' investments look dangerous and foolhardy.
Selling Thames Water will be the first big test of the Labour government's 'China audit', which was supposed to forge a more coherent policy with this rising power. That followed disastrous decisions to invite firms linked to Beijing into sensitive industries, such as nuclear power and advanced telecoms. They were reversed only after political outcry – and American pressure.
Sir Keir Starmer now claims to be trying to balance security concerns against economic opportunities. To sell Thames Water to a Chinese company would show how little he has learned.