UK woos Chinese car giant Chery to build new assembly plant despite spying concerns

A state-owned Chinese car firm is hoping to secure subsidies off the UK to build an assembly plant in a move likely to raise fresh security concerns.

Chery is weighing up where to construct a European factory, with Britain a potential option along with Spain, Hungary and the Czech Republic.

It comes amid warnings about the threat posed by China, with the UK and US recently identifying it as the source of a wave of cyber attacks.

US President Joe Biden has warned that Chinese vehicles could create a risk to national security and launched a sweeping review to establish whether they can be used for spying.

But UK investment minister Dominic Johnson has previously expressed his ambition to attract a Chinese car maker to build a factory in Britain.

Assembly plant: Chinese car giant Chery is weighing up where to build a new European factory with Britain a potential option along with Spain, Hungary and the Czech Republic

That could mean the Government – which has earmarked £2billion to boost the car industry – offering multi-million pound subsidies of the kind that it has already lavished on the likes of Tata and BMW.

Victor Zhang, UK boss of Chery subsidy Omoda, told the Mail: ‘Government support or incentives are a very important factor.’

Last month it emerged that China’s Eve Energy was in advanced talks to build a new electric vehicle battery site in Coventry.

China has gained a headstart in electric vehicle technology – at a time when traditional car makers are still struggling to adapt to the phasing out of petrol and diesel.

That means the country is seen by UK industry insiders as the most likely source of investment in a new car plant in Britain.

But US officials have adopted a much more cautious approach. And established car makers are worried that China could flood western markets with cheap cars.

Zhang brushed off fears that the company could pose a security threat, saying Chery was already established in a number of global markets including Australia and New Zealand.

‘Although we are based in China, we are actually more like an international company because we have so many footprints in different countries,’ he said.

‘No matter which country we go to, we will abide by the local policy – otherwise you cannot keep doing business.’

But Professor Jim Saker, president of the Institute of the Motor Industry, representing professionals in the sector, said other countries had rejected Chinese car makers due to security concerns and cited remarks by the head of MI5 about the threat posed by the country.

‘Why is it that the UK Government wants to subsidise a Chinese manufacturer when Ken McCallum, the head of MI5, is stated as saying that Chinese espionage in Britain is operating on an “epic scale”?’ Saker asked.