The Thinker | No. 04/2026
Whatever the root causes of the controversies surrounding Lord Mandelson’s recent security vetting and diplomatic appointment, His Majesty’s (HM) Government must not miss the broader lesson: a lack of clear strategic thinking regarding the United Kingdom’s (UK) relations with the People’s Republic of China (PRC) continues to compromise national security.
It is notable that recent public scrutiny of Lord Mandelson’s vetting – and the past PRC-related client roster of Global Counsel, the advisory firm he co-founded, which has entered administration – coincided with a tribunal ruling on the case of Imagination Technologies. Ron Black, its Chief Executive Officer (CEO), blew the whistle on an operation to transfer sensitive technology to the PRC, after HM Government had allowed a Chinese venture capital company, Canyon Bridge, backed by a state-owned company, China Reform, to buy Imagination Technologies in 2017.
This is a prime example of how the Chinese Communist Party (CCP), through its companies – both state-owned and private – sets about filling important gaps in its technology inventory. The threat is not just the acquisition of dual (military) use technologies, but also forcing British, American, and European competitors from the market, thus creating long-term and dangerous dependencies.
The controversial transfer of assets belonging to Imagination Technologies, Britain’s second largest microchip design company, was carried out under the eyes of HM Government. To help navigate the UK’s regulatory and political landscape, Canyon Bridge engaged the services of Global Counsel to reassure British stakeholders and smooth the process.
Details of the Imagination Technologies case are laid out in an excellent report and follow-up article published by UK-China Transparency, an organisation that has exposed a number of instances of CCP interference in Britain. In essence, HM Government allowed Chinese investment in Imagination Technologies on the condition that Intellectual Property (IP) and accompanying know-how remained in the UK. The United States (US) Government had already specifically withheld this technology from the PRC. It had also banned Canyon Bridge from acquiring an American technology company.
Black became worried about what he perceived to be attempts to get around the conditions set for the deal, including using British engineers to train Chinese engineers in the PRC, effectively axing their own jobs, and moving the company and its technology to the PRC. When he concluded that internal argument and resistance were not succeeding, he blew the whistle, was sacked, and launched an employment tribunal case.
When seeking to build influence in British governance, state-backed entities often leverage the legitimate channels established by international businesses and lobbying firms. High-profile advisory firms can find themselves operating at the volatile intersection of corporate advisory and geopolitical risk. The UK’s historically permissive regulatory environment has allowed foreign-backed entities to engage well-connected British consultancies in order to advocate for their interests.
Before its collapse into administration in early 2026, Global Counsel’s client roster is alleged by a British public relations expert (then also advising China Reform) to have included China Reform. Other companies included Wuxi App Tech, a company the US Government claims is a national security risk. As highlighted in Martin Thorley’s All That Glistens: Chinese Party-State Influence in Britain, the methodology by which foreign state interests exploit these legitimate corporate and lobbying channels represents a systemic vulnerability. The CCP does not always need to establish covert channels; it can simply leverage the access provided by existing channels. Any government official working on the PRC who has not read Thorley’s account is remiss.
In sum, the Imagination Technologies story represents a case study in how the CCP sets out to acquire sensitive technology. HM Government should use the case as the basis for reinforcing and drawing up measures which would prevent recurrence.
Lessons and recommendations from the Imagination Technologies acquisition
HM Government should quickly ensure that a working committee – with outside advice and involvement – covers a minimum of seven areas:
A clearly articulated strategy for UK-PRC relations: This must set out how to balance (realistically assessed) opportunities against threats to national and economic security. The 2025 ‘China Audit’ provided no clarity within government, business, academia, Parliament, or society. David Lammy, then Foreign Secretary, insisted that the contents must remain secret. Since very few civil servants are vetted to secret level, most policymakers remain in the dark. Without overarching guidance, unity of government purpose will continue as a mirage in the Gobi Desert.
Establish a centre for countering disinformation and interference: This would ideally be modelled on the lines of the Australian Counter Foreign Interference Coordinator’s office. While it may carry out some activities that are withheld from the public, its default position should be openness. Currently, the Joint State Threats Assessment Team lies buried in the bowels of the Security Service. No one outside HM Government – and few inside – are aware of its existence. It should come out from the shadows.
List the PRC on the ‘enhanced’ tier of the Foreign Influence Registration Scheme: Under the National Security Act (NSA), this would hinder illicit CCP attempts to acquire technology and – equally important – the CCP’s aims of exporting its technologies with a view to creating monopolies and dependencies. Linked to this, there should be an obligation for CCP members in Britain to declare this as a conflict of interest when assuming a public position (e.g., at universities, when conducting sensitive scientific research, or in politics). Anyone inclined to doubt the need for this declaration should first read the oath taken by CCP members on joining the party.
More rigorous monitoring and implementation of existing legislation: The NSA, National Security Investment Act (NSIA), and the Procurement Act are fine laws, but only to the extent to which they are properly implemented. For example, so far, no Chinese companies have been put on the debarment list under the Procurement Act. Yet, particularly in the field of Cellular (IoT [Internet of Things]) Modules (CIMs), the dangers of allowing Chinese connectivity through CIMs have received increasing publicity. HM Government should carry out a regular, holistic review of measures designed to protect economic and national security. Its next iteration should use the Imagination Technologies acquisition – and the ease with which foreign-backed entities utilised elite British advisory networks – as a baseline for testing the system of defence.
Instituting more rigorous oversight of revolving doors: In October 2025, HM Government abolished the Advisory Committee on Business Appointments, a largely toothless organisation whose purpose had been to ensure that ministers and officials were not influenced in decision-making by the prospect of being hired at lucrative salaries upon retirement. Under the new system, an Independent Adviser on Ministerial Standards will rule on jobs for former ministers, while the Civil Service Commission will do so for senior civil servants. The involvement of high-profile advisory firms in transactions like the Imagination Technologies buyout underscores exactly why strict oversight of this revolving door is needed. So too does the recent scrutiny surrounding diplomatic appointments, such as the request from 10 Downing Street that Matthew Doyle be found an ambassador’s post. Whether the new system is sufficiently strong requires regular evaluation. It may also require underpinning by legislation.
Legislation to curb SLAPPs should be tabled urgently: ‘Strategic Lawsuits Against Public Participation’ are an iniquitous practice whereby rich companies and individuals kill knowledge, transparency, and public interest by threatening lawsuits they know they may not win, but which their targets do not have the financial means to defend against. It is increasingly being used by the CCP and its foreign representatives in ways deleterious to national security in free and open nations, especially the UK. Additionally, beyond a Chinese context, the benefits would be broad.
An inquiry into the PRC’s use of science and technology as a geopolitical weapon: The CCP is clear that it is in a ‘struggle’ with free and open countries and that the main battlefield is in science and technology. Using the Imagination Technologies acquisition and the corporate mechanisms that facilitated it as case studies, an inquiry should report on necessary measures for protecting Britain’s national and economic security.
Conclusion
It would be wrong to suggest that HM Government has ignored the issues raised here. Compared to the so-called ‘golden era’ of UK-PRC relations and even to more recent times, progress has been made. But too much remains to be done. Technology moves in months, governments in years. That gap must be closed. The CCP system moves in concert; more planned and more consistent. Democracies must speed up their reaction times, but also anticipate and implement prophylactic measures against hostile actors.
Charles Parton OBE is Chief Adviser to the China Observatory at the Council on Geostrategy.
To stay up to date with Observing China, please subscribe or pledge your support!
What do you think about this Analysis? Why not leave a comment below?