China's government is aiming to build a strategic advantage by shaping the world's use of technology, according to the head of the UK's GCHQ spy agency.

Sir Jeremy Fleming, the director of GCHQ, said that the Chinese Communist Party (CCP) is seeking to gain influence abroad by exporting technologies used in everything from devices connected to the Internet of Things (IoT), which power smart cities, to innovative new tools used by businesses. And those products, which could be appealing due to low prices, could come with "hidden costs" that endanger the security and privacy of everyone. 

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"As it is for every nation, technological innovation is key to China's growth. And that's because it's so central to how we communicate, trade, work and live," said Fleming speaking at the Royal United Services Institute (RUSI) Annual Security Lecture in central London. 

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Fleming said the UK wants to compete and collaborate with a strong China, but the question of how that strength is used -or misused -by the Chinese Communist Party is at the heart of the issue and said that this is an "increasingly urgent problem" that must be acknowledged and addressed.  

China has deliberately and patiently set out to gain strategic advantage by shaping the world's technology ecosystem, Fleming said. "So, we need to ask ourselves: are we happy with that?"

Fleming said that, as a result of this strategy, the definition of national security has grown into a much broader concept. "Technology has become not just an area for opportunity, for competition and collaboration, it's a battleground for control, values and influence," he said.

Some of this work comes in the form of setting standards around technology, and in the form of the government of China offering loans to supply Chinese technology to smaller countries -and this could be another area of concern. 

"This may be offers of new technologies, like smart cities, which have the potential to export surveillance and data," Fleming said. 

"In a future crisis, Beijing could exploit information covertly extracted from client economies and governments."

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And he warned: "Mortgaging the future by buying into the Chinese vision for technology may be attractive to some in the short term -particularly for nations suffering the stress of higher energy and food costs resulting from Russian's invasion of Ukraine. We need to offer alternative solutions that are practical, that are affordable, and are backed by international funding or market investment. If we don't, in the longer term, the hidden costs of China's cheap technology solutions will become very obvious."

But Fleming emphasized that it isn't just smaller and developing countries that need to be wary of the security threats posed by a mass rollout of Chinese technology. UK businesses and academics should think about whether certain technology contracts are worth the potential security and privacy risks, especially if those providers are closely tied to a hostile state. 

And while GCHQ plays a role in helping to protect UK organizations from foreign threats, organizations should also think about security and privacy issues when making decisions about their technology -and that cheap offerings from China could come with "hidden costs". 

"This will play out in your boardrooms, in your labs, in your team meetings. You should be protecting your systems and your IP. You should actively manage the potential threat in your dealings with China. The seemingly small daily choices around cyber, investment, IP protection and more, all matter," said Fleming. 

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