China can exploit laptops, cars and fridges to spy on United Kingdom

Among devices containing the modules are: laptop computers; voice-controlled smart speakers; smart watches; smart energy meters; fridges; lightbulbs and other appliances that can be controlled through an app. Photo / Getty Images

China has the ability to spy on millions of people in Britain by “weaponising” microchips embedded in cars, domestic appliances and even lightbulbs, ministers have been warned.

The “Trojan Horse” technology poses a “wide-ranging” threat to UK national security, according to a report sent to the Government by a former diplomat who has advised Parliament on Beijing.

The modules can collect and transmit data via the 5G phone network, allowing China to monitor the movements of intelligence targets including people, arms and supplies, and to use the devices, millions of which are already in use in the UK, for industrial espionage.

The report, published yesterday by the Washington-based consultancy OODA, says the potential threat outstrips that from Chinese-made components in mobile phone masts, which led to a Government ban on Huawei products in mobile phone infrastructure.

Ministers have completely failed to grasp the threat posed by the “pervasive presence” of the modules, known as cellular IoTs, the report says - a concern that has been echoed by senior MPs. It calls on ministers to take urgent action to ban Chinese-made cellular IoTs from goods sold in Britain before it is too late.

Charles Parton, who wrote the report, said: “We are not yet awake to this threat. China has spotted an opportunity to dominate this market and if it does so it can harvest an awful lot of data as well as making foreign countries dependent on them.” Parton spent 22 years of his diplomatic career dealing with China, Taiwan and Hong Kong, and has advised the Foreign Office and the EU and is a special adviser to the Commons foreign affairs committee.

Cellular IoTs - which stands for Internet of Things - are small modules used in everything from smart fridges to advanced weapons systems to monitor use and transmit data to the owner, and often the manufacturer, using 5G.

The Internet of Things describes devices that connect and exchange data with other devices over the internet. Cellular IoTs are the component that makes devices “smart”. A “smart” security camera uses a C-IoT to connect to your phone, an electric car might “talk” to charging stations to find out which ones are in use. As well as talking to other devices, they can send data back to manufacturers for quality control and to enable software updates but this provides a potential gateway for hostile actors to harvest data.

Earlier this month it emerged that the security services had dismantled ministerial cars and found at least one of the devices hidden inside another component. There were fears that China had the capability to monitor the movements of everyone, from the Prime Minister down, using the modules.

However, the problem goes far beyond ministerial cars, the report warns. Three Chinese companies - Quectel, Fibocom and China Mobile - already have 54 per cent of the global market in devices, and 75 per cent by connectivity and, like all Chinese firms, they must hand over data to Beijing if ordered to do so, meaning that the Chinese Communist Party can gain access to as many devices as it likes.

Customers of the three Chinese companies include Dell, Lenovo, HP and Intel in computing, carmaker Tesla, and the card payments company Sumup.

Among devices containing the modules are: laptop computers; voice-controlled smart speakers; smart watches; smart energy meters; fridges; lightbulbs and other appliances that can be controlled through an app; body-worn police cameras; doorbell cameras and security cameras; bank card payment machines, cars and even baths.

The spying potential is vast. Coupled with artificial intelligence and machine learning to process huge quantities of data, the report suggests China could, for example, monitor the movements of US weapons sales to work out if arms are going to Taiwan.

It could also work out the identities and addresses of royal and diplomatic protection officers or monitor the movements of targets via bank card payment terminals, and even work out who they were meeting, and when.

Sabotage is another concern if China decided to attack UK infrastructure by disabling the devices. Even such innocuous applications as agricultural machinery could help the Chinese spot vulnerabilities in supply chains.

Allowing China to monopolise the production of the devices - which are subsidised by Beijing to make them cheaper - would also make the West dependent on China for supplies.

The report by OODA (Observe, Orientate, Decide, Act - the mantra used by fighter pilots), says Western companies do make the devices so fighting China’s dominance is not “a lost cause”. But it warned: “It is time to wake up... free and open countries should ban Chinese-manufactured IoT modules from their supply chains as soon as possible.”

It recommends a complete audit of government property to replace the devices and suggests companies operating in sensitive areas, such as defence, must do this by the end of 2025.

The Internet of Things, described in the report as “the central nervous system of the global economy”, gathers data from devices that can be used for everything from planning energy supply to improving traffic flow.

Alicia Kearns MP, who chairs the Commons foreign affairs committee, said: “Because they are in so many of our mundane day-to-day objects, the risk if someone was able to weaponise them, is significant. You could track someone, and work out where the Prime Minister is going to be, for example.”

National security considerations have been woefully inadequate when it comes to industrial strategy. There are European alternatives [so] we need to phase them out. I think there are a series of Huawei-sized decisions that we haven’t made and we need to put national security and strategic resilience at the heart of everything we do.”

Quectel, Fibocom and China Mobile were all approached for comment.