UK’s Prime Minister Rishi Sunak will announce today the establishment of a new agency under MI5 to assist UK businesses in safeguarding themselves against Chinese espionage and state-sponsored hacking. The announcement is part of the UK’s updated diplomatic and defence strategy in relation to China.

The new agency, called the “National Protective Security Authority”, will be unveiled by Sunak and will provide advice to businesses and universities on how to handle industrial espionage. Officials have likened the agency to the National Cyber Security Centre (NCSC), created by GCHQ in 2016, which serves as the central authority responsible for protecting the country against cybersecurity threats.

It also routinely offers guidance to organisations and the wider public on cybersecurity best practice.

The National Protective Security Authority will be able to help organisations by providing advice on how to deal with Chinese companies, how to do business in China, or how to buy equipment from companies located in the country.

The motivation for the agency’s creation is thought to be born out of longstanding concerns around China and its history of conducting sophisticated cyber attacks against organisations in the West. Academics and business leaders in the UK and US were cautioned by MI5 and the FBI last year regarding the increasing danger posed by Chinese spies who aim to pilfer intellectual property, academic research, and other confidential data.

The government’s new authority will also provide guidelines on how to approach Huawei or Hikvision, although it isn’t clear yet what these are.

It was decided that Huawei’s equipment would be removed from the UK’s 5G network in 2020 to protect national security, a move encouraged by US sanctions placed on the Chinese company.

In July 2022, a group of MPs also demanded that Chinese surveillance equipment companies like Hikvision should be banned from the UK, expressing concerns about the ethics and security of the company.

Lastly, the new agency is expected to provide guidance on takeovers in “sensitive” industries. In July 2021, an MP raised concerns about Chinese-owned Nexperia acquiring Newport Wafer Fab (NWF), a Welsh semiconductor company.

When the deal was made, MP Tom Tugendhat expressed his astonishment that it had not been subjected to a review under the National Security and Investment Act.

“The semiconductor industry sector falls under the scope of the legislation, the very purpose of which is to protect the nation’s technology companies from foreign takeovers when there is a material risk to economic and national security,” he said.

“The government is yet to explain why we are turning a blind eye to Britain’s largest semiconductor foundry falling into the hands of an entity from a country that has a track record of using technology to create geopolitical leverage.”