The Government is facing calls from MPs to ban China and Russia from any involvement in supplying equipment to Britain’s armed forces.
The Commons Defence Sub-committee said the widespread use of overseas firms in the UK defence supply chain left it open to “potentially hostile foreign involvement”.
It said that China in particular had a record of large-scale intellectual property theft, raising concerns that any UK firm working alongside Chinese suppliers could have their technology stolen.
The committee urged ministers to draw up a list of “friendly” countries they were happy to see continuing to invest in the defence supply chain, while the rest should be barred.
“Countries which consistently involve themselves in intellectual property theft, and regularly behave contrary to the UK’s values, such as China under the Chinese Communist Party, should be categorised as hostile,” it said.
“Investments from countries, such as Russia, that regularly engage in espionage against the UK, or its allies, should also be classified as hostile.”
The committee listed nine companies operating in the UK defence sector which, it said, had been acquired by Chinese firms in recent years.
They include eXception PCB, a Gloucestershire-based firm which supplies printed circuit boards used in the American F-35 fighters operated by both the British and US armed forces.
The MPs also expressed dismay at a decision to acquire two second-hand Chinese 737 airliners to convert into E-7 Wedgetail aircraft carrying the UK’s airborne early warning and control capacity.
“This is deeply concerning. The purchase of equipment from China for use by the armed forces should not be considered a viable option by the Ministry of Defence,” it said.
The sub-committee chairman, Richard Drax, said: “Despite the Government demonstrating an understanding of the risks that foreign involvement in the defence supply chain poses, more should be done to maintain the integrity and autonomy of our defence industry.
“This heightened awareness of risks must lead to a tightening of regulations and a new approach.
“Investment in the defence supply chain from all countries that fall outside of an approved list, including Russia and China, must be barred.
“We cannot afford a laissez-faire approach to our national security and sovereignty.”