Summary

• The Commons Business, Innovation, Science and Trade Committee wants high-risk connected technology excluded from critical national infrastructure.
• MPs recommend stronger controls over connected vehicle data and transfers of sensitive research and technology.
• A proposed red, amber, and green framework would distinguish prohibited activities from trade that can continue with safeguards.

British MPs have recommended excluding high-risk Chinese connected technology from critical national infrastructure, alongside stronger oversight of connected vehicles and sensitive information, as part of a proposed framework governing the UK’s economic relationship with China.

The Business, Innovation, Science and Trade Committee published its report on 2 November, calling for clearer boundaries around technology investment, strategic industrial capabilities, and the transfer of data that could present national security concerns.

The report recommends a policy of risk-managed growth that would allow lower-risk commercial relationships to continue while restricting activities considered incompatible with national security or economic resilience. It argues that businesses currently face uncertainty because major decisions involving Chinese investment and technology have not consistently followed a published strategic framework.

These are recommendations to the government rather than new statutory restrictions. Existing procurement, investment screening, data protection, and security requirements continue to apply while ministers consider whether to introduce additional measures.

Connected equipment raises infrastructure concerns

The committee wants the government to prohibit high-risk connected technology in critical national infrastructure and strengthen the regulation of data transfers between connected vehicles in Britain and foreign organisations.

Connected equipment can exchange information with external services after installation, sometimes through software updates, remote maintenance, or continuous monitoring. These capabilities support legitimate commercial and operational functions, but they also create dependencies on suppliers and communications systems that may sit outside the organisation operating the equipment.

For an infrastructure operator, those dependencies can influence both security and resilience. Equipment that depends on remote access for configuration or maintenance may require additional safeguards, while a supplier’s ability to receive operational information can raise questions about data sensitivity and the extent of external access.

The committee’s concerns are especially pronounced where technology forms part of essential services or systems used by government, defence, and emergency organisations. It recommends reducing exposure to equipment whose communications or control arrangements create risks that cannot be managed adequately.

Assessing those risks requires more than identifying the manufacturer of a finished product. Connected equipment may contain components from several suppliers, operate through telecommunications services maintained by others, and use software that changes through updates over its working life.

Any new restrictions would therefore require practical definitions of the products, capabilities, and supplier relationships considered unacceptable. Infrastructure operators would also need sufficient guidance to distinguish prohibited technology from systems that could remain in use with additional controls.

Vehicle data becomes an economic security issue

Modern vehicles generate information through navigation systems, telematics, cameras, sensors, and software used for diagnostics and maintenance. Some of that information is transferred to manufacturers or service providers to support fleet management, performance monitoring, and the delivery of connected features.

The same arrangements can expose sensitive patterns of movement or operational activity if information is collected or accessed inappropriately. Vehicles used by public authorities or essential services may be of particular concern because their location and usage can reveal information about facilities, personnel, or operational routines.

The committee recommends stronger regulation of data traffic between vehicles operating in Britain and foreign entities. It is seeking an approach that addresses the movement of sensitive information and the extent of external access, rather than relying solely on measures applied when a vehicle is first purchased.

Fleet operators already face responsibilities involving cybersecurity, personal information, and the reliability of connected services. More explicit national security rules could add requirements for examining software, contractual access rights, communication routes, and the ability to restrict remote functions.

Such controls would need to be compatible with the practical operation of vehicles, particularly where manufacturers provide essential software updates or maintenance support. Replacing an established technology platform may also involve procurement costs and the availability of suitable alternatives.

Sensitive research and strategic investment

Beyond connected devices, MPs recommend strengthening protection against the transfer of sensitive technology and data to China. Research organisations, advanced manufacturers, and businesses developing technologies with potential security applications could face greater scrutiny under the proposed approach.

Scientific cooperation remains important to many industries, but particular projects may involve intellectual property, specialist knowledge, or equipment relevant to strategic capabilities. Universities and businesses therefore need guidance that distinguishes legitimate collaboration from activities requiring restrictions or additional safeguards.

The committee also wants stronger powers for the continuing review of foreign ownership of strategic UK assets. Its concern extends beyond the initial approval of an investment to situations where ownership arrangements or the security implications of an asset change over time.

A decision about an overseas investment can affect manufacturing capacity, supplier relationships, and employment, while also influencing who controls strategically important infrastructure or technology. The committee argues that these competing considerations should be evaluated within a more predictable national framework.

It cites the proposed £1.5 billion Ming Yang wind turbine manufacturing project as an example of the uncertainty that can arise when security concerns lead to a decision late in a lengthy investment process. The wider report also examines the government’s intervention at British Steel, arguing that reactive decisions have increased uncertainty for businesses.

Three categories of economic engagement

The committee proposes dividing areas of economic engagement into red, amber, and green zones. Activities in the red category would be prohibited where they threaten national security or sovereign capabilities, while amber activities would be permitted with enforceable safeguards and green activities would be encouraged where risks are low.

Applying such a system would require the government to identify capabilities that Britain must control independently, those that could be secured through trusted international partners, and areas where ordinary commercial competition remains appropriate.

Technology suppliers frequently operate across these boundaries. Semiconductor components, networking equipment, industrial software, and scientific research can have several commercial uses, meaning that a simple sector label may not identify every activity requiring review.

The committee’s proposed model would therefore depend on clear rules and effective coordination across departments. Without sufficiently precise definitions, businesses could continue facing uncertainty over investment, procurement, and supply arrangements even after the introduction of a new framework.

The report also recommends stronger trade remedies against unfairly subsidised imports, action to reduce dependence on vulnerable supply chains, and restrictions on goods produced using forced labour. These proposals extend the economic security approach beyond technology into manufacturing and international trade.

Government response will determine implementation

The committee acknowledges that China remains an important commercial and scientific partner. It does not recommend ending all economic engagement, instead arguing for restrictions in strategically sensitive areas and active support for trade where risks can be managed.

For British businesses, clearer rules could influence decisions about suppliers, research partnerships, production sites, investment, and access to overseas markets. Additional safeguards may also create compliance and replacement costs, particularly where connected technology has already been incorporated into infrastructure designed for long operating lives.

The government will consider the committee’s recommendations through the established parliamentary response process. Any resulting legal restrictions or changes to regulatory powers would require further policy decisions and, where necessary, legislation.

The report establishes a detailed set of proposals rather than an immediate change in the treatment of individual suppliers. Its practical effect will depend on whether ministers adopt a defined approach to strategic technologies and communicate the resulting obligations to businesses and infrastructure operators.