China has said it is highly concerned about the future openness and safety of Chinese investments in the UK after the Commons defence select committee said the presence of Huawei in UK 5G networks represented “a significant risk to individuals and government”. The committee also dismissed claims by Huawei that it was independent from the Chinese Communist party. A Chinese foreign ministry spokeswoman, Hua Chunying, said in response to the report that some in the UK should think before they speak and that the legitimate interests of Chinese companies were being damaged. “The openness and fairness of the UK market, as well as the security of foreign investments there, is highly concerning,” she said, speaking at a daily news conference in Beijing on Friday. Huawei responded to the report by saying it lacked credibility. “It is built on opinion rather than fact. We’re sure people will see through these groundless accusations of collusion and remember instead what Huawei has delivered for Britain over the past 20 years,” a company spokesman said. The Chinese foreign ministry reaction, although in line with other recent criticism of UK policy towards China, underlines the risks British and Chinese firms face as they seek to trade in each other’s markets. The MPs had admitted that “ending China’s involvement in the UK’s critical infrastructure would be a radical step with huge implications for the UK’s economy”, but they also warned that “if threats by the Chinese state continue and worsen, the government should carefully consider China’s future presence in critical sectors of the economy”. The latest comments from China are likely to add to calls for the government to use the imminent national security and investment bill to take wider powers to block new or existing foreign investments that threaten Britain’s national interest. Chinese investments in the nuclear industry and potentially HS2 are judged to be the most controversial. The Chinese reaction comes despite the select committee holding back from assessing Huawei’s presence in UK 5G as a major risk. The MPs point out the UK government’s cyber experts had been clear that the original UK plan, set out in January 2020 but subsequently abandoned under US pressure in July, to restrict Huawei to 35% of the market had been correct. The MPs also found there was no risk of Huawei being able to access UK intelligence communications through its access to 5G. The committee said the UK ministers had in effect been forced to change their position to a complete removal of Huawei by 2027 mainly due to the US decision in May to ban the use of reliable US chips in the Huawei network. That meant Huawei 5G in turn was no longer as reliable. “From our public and private conversations with the government,” the MPs reported, “we were confident that GCHQ and the National Cyber Security Centre (NCSC) were able to appropriately manage any increased risk posed by the presence of Huawei or other high-risk vendors in the UK’s 5G. Furthermore, we recognised that whilst the risk remained manageable, it was important to remember the benefits in having a greater number of vendors involved in 5G network provision.” The NCSC told the committee there was no technical reason for the UK’s close intelligence allies – the US and Australia – to ban Huawei outright, leading the MPs to conclude that steps had been taken for geopolitical reasons. The MPs also warned of blackouts across the network if the government tried to speed up the Huawei phaseout to a date as early as 2025. In one of the most damning passages of the report, the committee said Huawei “is clearly strongly linked to the Chinese state and the Chinese Communist party, despite its statements to the contrary, as evidenced by its ownership model and the subsidies it has received. Additionally, Huawei’s apparent willingness to support China’s intelligence agencies and China’s 2017 national intelligence law are further cause for concern.” The MPs also expressed concern that the recent discussions about UK allies cooperating to form an alternative to Huawei remained hazy, pointing out that the ejection of Huawei would leave the UK with a three-company vendor market, which presents a resilience risk of its own. They said one of the three firms still active in the UK market – the Swedish firm Ericsson – was highly dependent on Chinese products.