UK firms invest millions in Chinese spying giant

INTERNATIONAL DESK: Some of the UK’s biggest financial firms have ploughed millions of pounds of savers’ money into a Chinese surveillance company accused of being complicit in the persecution of Uighur Muslims, The Mail on Sunday can reveal.

HSBC, Legal & General and BlackRock are among the finance giants to have put investors’ cash in Zhejiang Dahua Technology, which is backed by the Chinese state.

Dahua, which makes high-tech CCTV cameras, was one of the companies named in a report last week warning of the risks of British police forces using Chinese surveillance technology.

China has been accused of committing crimes against humanity in its treatment of the Uighur people in the north-western region of Xinjiang.

Ethical and security concerns have been raised over reports that Dahua has developed facial recognition software that can detect ethnicity and alert police to the presence of Uighur Muslims.

Dahua has more than ten UK-based institutional investors. Fidelity International has the largest stake with 22 million shares, followed by BlackRock Advisors UK with almost 3 million, according to Refinitiv data. HSBC, Aviva, Abrdn and L&G also hold stakes, albeit much smaller.

Tory MP Bob Seely, a member of the Foreign Affairs Select Committee, said: ‘All these companies investing in these Chinese firms that do unethical things will come to regret it as it will damage their reputation. Frankly, to be investing in a company that ethnically monitors people is a pretty ugly business to be in. It’s just not right. I am sure there are easier and better ways to turn a profit.’

The UK’s surveillance tsar Professor Fraser Sampson revealed last week that Chinese-made camera systems – including those made by Dahua – were being used throughout Britain.

Prof Sampson warned that people should worry more about Chinese CCTV cameras than spy balloons high in the sky. His audit was conducted by the Office of the Biometrics and Surveillance Camera Commissioner.

Dahua has been blacklisted by the United States government since 2019 for allegedly supporting a state-backed campaign of ‘repression, mass arbitrary detention and high-technology surveillance against Uighurs’.

The company, which has been listed on the Shenzhen Stock Exchange since 2008, is one of the world’s largest makers of surveillance equipment.

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As well as naming Dahua, the Sampson report also pointed to China’s Hikvision and Huawei. Some of the stakes in Dahua held by the UK savings giants, such as the ones owned by Aviva and Abrdn, are in ‘passive’ funds, which hold a basket of shares that track a share index.

This means the fund manager does not make an active decision to invest in Dahua, but that the holding comes as part of the basket.

Investment giant Schroders was last year reported to have ditched large stakes in both Hikvision and Dahua over ethical concerns.

Mark Johnson, of Big Brother Watch, said: ‘The fact that British financial services are profiting from Chinese state-owned surveillance companies is deeply concerning. These are companies whose products are associated with serious human rights abuses, ethnic persecution in China and national security risks to the United Kingdom.

‘The UK is dominated by Chinese-made Hikvision and Dahua cameras.

‘British money should be nowhere near companies implicated in genocide and modern slavery. The UK should follow the example of the US and push our financial sector to divest from these rights-abusing technologies.’

In July 2021, the Foreign Affairs Committee in Parliament published a report that said ‘equipment manufactured by companies such as Hikvision and Dahua should not be permitted to operate within the UK’.

This was part of an attempt to block UK firms from providing ‘blueprints or financing for further technology-enabled human rights abuses’.

Tensions are running high between China and the West over claims that the country has detained more than one million Uighurs, who have allegedly been targeted by mass surveillance.

There are also increasing concerns that Chinese CCTV is a security risk in Britain and fears are growing that it could give the ruling Communist Party in Beijing access to data on UK citizens.

Findings published by Prof Sampson last week revealed that 18 police forces in the UK monitor high streets and other public spaces using CCTV cameras made by Chinese firms linked to security or ethical issues. He expressed concerns that police forces were ‘shot through’ with cameras, drones and number plate readers made by Chinese operators.

All investment firms named in this article were contacted.

Fidelity said: ‘We have found that our Chinese companies are very receptive to our active engagement and have shifted policies accordingly.’

A spokesman for Legal & General said: ‘LGIM manages many index funds against a range of different index providers to meet a wide variety of different client demands.’

Abrdn said it ‘has no exposure to Dahua in any of its actively managed portfolios’. (Daily Mail)