The government has “no strategy” to tackle the threat from China and has left the UK “severely handicapped” due to its “short-termist approach”, a new report has claimed.

The Intelligence and Security Committee (ISC) – made up of cross-party MPs – has published its work on the threat Beijing poses, saying China had managed to “successfully penetrate every sector of the UK’s economy”.

But it pointed a lot of fingers at Whitehall, saying resources invested into tackling the threat were “completely inadequate” and the “slow speed” in acting left “a lot to be desired”.

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Prime Minister Rishi Sunak said he welcomed the report, claiming China posed “an epoch-defining challenge to the international order”.

But while he accepted there was “more to do”, the PM said the committee had taken “the bulk of its evidence” from 2020, and since then, the government had strengthened its position with additional laws.

“We will continue to engage with China to preserve and create space for open, constructive, predictable and stable relations that reflect China’s significance in world affairs and to ensure our interests and those of our allies are best advanced,” he added.

The Committee’s chair, Tory MP Sir Julian Lewis, reacted angrily, calling Mr Sunak’s response “defensive”, and telling Sky News the ISC had included multiple updates to report since 2020.

He also said there was a “record of resistance” to the committee’s scrutiny from Downing Street, adding: “The fact is [the government] are very resistant to giving us that sort of scrutiny and fear it because they know we put a great emphasis on security [rather than investment].”

The government has been accused of sitting on the sensitive report after the ISC launched its inquiry in 2019 and sent a draft to the prime minister on 15 May.

One of the Labour members’ of the committee, Kevan Jones, said they had asked the Cabinet Office why it had taken so long for the report to be returned to them, but had yet to have an answer.

He also called Mr Sunak’s response to the report “pretty weak”, telling Sky News Downing Street did not have “the courtesy” to give the committee the response before it was seen by the media.

Chaired by Conservative MP Sir Julian Lewis, the nine-member committee scrutinises the work of the UK’s intelligence agencies including MI5, MI6 and GCHQ.

‘Wake-up call’

The ISC’s findings come as Mr Sunak comes under pressure from some of his backbenchers – including former PM Liz Truss – for not taking a more hawkish stance on China.

The report warned that Chinese state intelligence was “almost certainly the largest in the world”, and it targets the UK “prolifically and aggressively” in a way that poses a “challenge” for British intelligence agencies.

It also said the UK was of “significant interest to China when it comes to espionage and interference”, placing the country “just below China’s top priority targets”.

The committee outlined a number of areas where this was impacting the UK, including the national security threat it posed, its interference in academia and its targeting of industry – particularly nuclear energy, where Beijing’s “scale of investments… demonstrates [its] determination to become a permanent and significant player”.

But it said the fact the country was a strategic threat was “not news”, and the point of the report was – as Tory MP and member of the ISC Theresa Villers put it – to be a “wake-up call” to the government to act.

“The government told the committee that its response to the threat is ‘robust’ and ‘clear eyed’,” the document read.

“China experts were rather less complimentary, concluding that the government has no strategy on china, let alone an effective one, and that it was singularly failing to deploy a ‘whole-of-government’ approach – a damning appraisal indeed.”

Interference from the Chinese government in the UK was “not hard to detect”, it added, but government departments “may not previously have been looking for it”, and there was “no evidence that those departments have the necessary resources, expertise or knowledge of the threat to counter China’s approach”.

The report added: “The UK is now playing catch up and the whole of government has its work cut out to understand and counter the threat from China.

“Yet the government’s focus is still dominated by short-term or acute threats. It has consistently failed to think long-term – unlike China.

“The UK is severely handicapped by the short-termist approach currently being taken.”

The committee also quoted the director general of the MI5, who told the MPs the rise of China “raised huge questions for the future of the western alliance”.

They said: “None of us can give a confident long-term answer to exactly how the balance of power plays out globally across the next few decades, but it is clear for all of us that this is, I think, the central intelligence challenge for us across the next decade.”