UK taxpayers may be liable for up to £4 billion due to past government decisions that permitted Chinese investment in sensitive sectors, according to a report by the China Strategic Risks Institute. The report, published August 9, 2026, highlights expenditures on the bailout of British Steel and the removal of Chinese firms from strategic nuclear and communications projects.
The potential costs include at least £2 billion for phasing out Huawei from the UK's 5G network, approximately £600 million for the renationalization of British Steel, and £100 million to buy out China Nuclear General from the Sizewell C nuclear power station project.
Further costs could arise if the government is required to compensate Jingye, the former owner of British Steel, which purchased the company under a previous administration. British Steel owed Jingye £960 million in inter-company loans as of the end of 2024, which Jingye may seek as part of compensation claims.
"Far too often the British taxpayer has been asked to pick up the tab for questionable and failed Chinese investments in sensitive parts of the economy," said Sam Goodman of the China Strategic Risks Institute, referencing the potential £3.7 billion bill. He suggested these funds could have been allocated to public services such as schools, hospitals, and clearing court backlogs.
The report contrasts the current situation with a period over a decade ago when relations were more cordial, citing an instance where then-Prime Minister David Cameron hosted President Xi Jinping for a meal.
However, Edwina Currie, a former minister, defended past decisions, stating that China's posture has become more aggressive under Xi in recent years, necessitating adaptations. Some economists and Members of Parliament have argued against compensating Chinese entities for British Steel.
The UK government responded to the report's findings, stating that the analysis inaccurately represents spending on Huawei removal and conflates commercial decisions with government actions. The government affirmed its commitment to maintaining a relationship with China, welcoming investment, and pursuing opportunities that benefit the taxpayer. "We cooperate where we can and challenge where we must, engaging on trade where it supports our national interests," a government spokesperson stated.