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British spy boss says Beijing’s moves to control tech, digital currency and markets

Beijing’s efforts to exert control over technology both internationally and within China’s borders threaten future global security and freedom, the chief of the UK’s electronic intelligence agency said.

Jeremy Fleming, the director of Britain’s Government Communications Headquarters, said Beijing was aiming to use an array of existing and emerging technological means, including digital currency and satellites, to control markets and people, extend surveillance and censorship and export its authoritarian system around the world.

Calling it “the national security issue that will define our future,” Fleming said the Chinese Communist Party leadership has “deliberately and patiently set out to gain strategic advantage by shaping the world’s technology ecosystems.”

The sharp warning on 11 October from the head of the UK equivalent of the National Security Agency came during a rare speech in London. While Fleming discussed other security priorities, including the war in Ukraine, the most of his speech focused on the rising threat from Beijing that US and other Western intelligence officials have increasingly described in existential terms in recent years.

“The remarks of the British official have no factual basis at all,” said Mao Ning, a spokeswoman for China’s Foreign Ministry, at a daily briefing in Beijing on 11 October. “China’s technological development is aimed at making lives better for the Chinese people. It does not target anyone, still less pose any threat.” China has previously denied Western accusations that it is seeking to leverage technology for nefarious purposes.

Fleming said Beijing has effectively broadened the definition of national security such that technology was a battleground for control, values and influence. He said Beijing was seeking to create “client economies and governments” through exporting technologies around the globe.

Fleming didn’t name specific companies, but Western officials have long warned that telecommunications gear from Chinese giant Huawei Technologies could be used by Beijing to conduct digital espionage or other malicious cyber activity. Huawei and China have both repeatedly denied the allegations.

Fleming said that Beijing’s efforts to build a central-bank digital currency could allow it to monitor transactions for oppressive means. A centralised virtual currency could also allow China in the future to evade international sanctions like the ones imposed on Russia during the Ukraine war, he added.

The intelligence chief said China’s Beidou satellite system was intended as an alternative to the established Global Positioning System network, which is owned by the US, and Beijing is forcing Chinese citizens and businesses to adopt it. Beidou is part of a strategy that could allow China to deny other nations access to space in a conflict, Fleming said.

“Without the collective action of like-minded allies, the divergent values of the Chinese state will be exported through technology,” Fleming said, urging Western powers to invest more in emerging security technologies, such as quantum computing, and increase collaboration with industry and each other to blunt China’s ambitions.

Fleming’s speech followed similar rhetoric to business leaders in July by Federal Bureau of Investigation Director Chris Wray and his UK counterpart, Ken McCallum, director-general of MI5. Wray and McCallum reiterated warnings about Chinese espionage, especially with regards to potential theft of Western tech companies’ intellectual property.

Fleming addressed Russia’s invasion of Ukraine, saying that significant miscalculations by President Vladimir Putin had led to staggering costs on the battlefield.

“With little effective internal challenge, his decision-making has proved flawed,” Fleming said. “It’s a high-stakes strategy that is leading to strategic errors in judgment. Their gains are being reversed. The costs to Russia — in people and equipment — are staggering. We know — and Russian commanders on the ground know — that their supplies and munitions are running out.”

Russian forces are exhausted and the recent mobilisation of inexperienced conscripts “speaks of a desperate situation” for Putin, Fleming added.

Write to Dustin Volz at dustin.volz@wsj.com

This article was published by The Wall Street Journal, part of Dow Jones Newswires

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