Weeks after the school shut its doors for the last time, its website still boasts of ‘the exceptional Malvern St James experience’, hailing the ‘picturesque setting’ and its Gothic Revival building ‘lying at the foot of the magnificent Malvern Hills’.
Strangely enough, the site makes no mention of the furious row that played out at the school before it closed.
Parents and ex-teachers remain seething at the alleged behaviour of the school’s Chinese owners, accusing them of being ‘vultures circling’ and of asset-stripping to get their hands on the institution’s valuable land and facilities.
Parents, who say they were given little notice of the school’s closure, are threatening legal action, many having paid thousands of pounds of fees up front.
The sudden closure of Malvern St James came a little over a year after it was acquired by Galaxy Global Education (GGE), a Chinese company. It is one of three British independent schools the organisation abruptly shut at the end of the summer term this year.
The other two are 142-year-old Durham High School and the 742-year-old Ruthin School in Denbighshire, North Wales, where John Lennon’s son Julian was educated.
Parents of Durham High School students had received a letter from the school’s Chinese owner just a month before the closure, denying rumours that it was about to be shut down. Angry Durham MP Mary Kelly Foy accused GGE of a ‘land grab’ and called for an independent investigation.
Pointing out that the land on which the school sits is worth £10million, she asked in the Commons: ‘What can the government do to stop predatory overseas companies from asset-stripping our educational institutions and treating our children’s future as real estate speculation?’
China’s Consul-General Tang Rui meeting Andy Burnham at the Consulate General in Manchester in April this year
Malvern St James officially closed at the end of its summer term in July this year, with parents and ex-teachers seething at the alleged behaviour of the school’s Chinese owners
GGE denied ‘any suggestion that the school was acquired for its land or that there has been any asset stripping’. The founder of the company, Shangmei Gao, said she had underestimated the financial challenges of a sector hit by the Labour government’s imposition of VAT on school fees.
According to research by Venture Education, more than 30 British independent schools have been bought by Chinese investors, raising concerns over Chinese Communist Party (CCP) influence over British education and calls for greater transparency and more protections. Saqib Bhatti, the Tory shadow education minister, has since demanded a review into schools owned by GGE and why they closed, saying: ‘Chinese business groups are not independent of the state. This means the Chinese Communist Party is now responsible, in effect, for the education of thousands of our children… There are clear national security concerns here, yet there is currently little to no data or analysis on the true extent of Chinese investment in our independent schools.’
Yet concern over the unscrupulous behaviour and often dark motives of predatory Chinese companies goes beyond the education sector. From the playing fields of British independent schools to the blast furnaces of Scunthorpe, the track record of Chinese firms is extremely worrying, and screams out for caution.
Earlier this year, Ron Black, the former chief executive of Imagination Technologies, one of Britain’s biggest and most influential technology companies, was awarded £1.5 million after an employment tribunal ruled that he had been unfairly sacked for blowing the whistle on attempts by Chinese investors to take over his company’s board and transfer the technology to China. Chinese investors had been allowed to buy the company, which designs cutting-edge mobile graphics processors, after assurances that the investment was ‘passive’.
Then there is British Steel, which was fully nationalised this summer, provoking angry demands for compensation from the Jingye Group, its former Chinese owner. The British government took control of the Scunthorpe steelworks, this country’s last remaining virgin steel-making facility, last year after Jingye had been accused of trying to sabotage the blast furnaces and import steel from its vast stockpiles back home.
Business Secretary Jonathan Reynolds accused Jingye of not acting in good faith and said: ‘I wouldn’t personally bring a Chinese company into our steel sector.’
The company’s chairman Li Ganpo is a member of the CCP, while the company’s headquarters in Sichuan province is ecstatically described on its own website as a ‘revolutionary holy land’.
Workers at Grangemouth, Britian’s oldest oil refinery, and Scotland’s only such facility, were not as lucky as those at British Steel.
The refinery, half-owned by state-run PetroChina, closed last year with the loss of 400 jobs.
Critics, emboldened by the government’s intervention in Scunthorpe, had argued to no avail that its loss would erode Britain’s energy security. Union leaders claimed then-energy secretary Ed Miliband and other political leaders had ‘utterly failed’ the workforce. It is not as if there have been no warnings in Britain about rapacious Chinese companies, which are required under Chinese laws to work with the country’s security and intelligence agencies.
It was four years ago that the head of MI5, Ken McCallum, addressed an extraordinary gathering of business and academic leaders in London, warning: ‘By volume, most of what is at risk from Chinese Communist Party aggression is not, so to speak, “my” stuff. It’s yours. The world-leading expertise, technology, research and commercial advantage developed and held by people in this room, and others like you.’
McCallum gave his address alongside FBI Director Chris Wray, the two men describing China as ‘a massive, shared challenge’. Their focus that day was on technology theft, but their wider point was that the CCP does not just achieve its aims by spying, but through commercial takeovers and other tie-ups.
McCallum cited the example of Smith’s Harlow, a once world-beating British precision-engineering firm, forced into administration after it transferred know-how to a Chinese partner, who abandoned the deal, effectively running off with the technology.
The American Enterprise Institute estimates the value of Chinese investments and contracts in the UK between 2005 and 2024 at $104.7 billion (£77 billion), during which Britain was the third-largest recipient of Chinese investment after America and Australia.
These are spread across numerous sectors from nuclear power to property, black cabs to football clubs – and of course schools.
The heyday in Sino-UK relations was the so-called ‘golden era’ inaugurated by the wide-eyed then-PM David Cameron and his chancellor George Osborne.
This was around the time of a fawning 2015 state visit the UK laid on for President Xi Jinping. The big concern of security officials is that Prime Minister Andy Burnham and his China-friendly Foreign Secretary Ed Miliband are plotting a return to that era.
Back then, due diligence of Chinese investments often appeared to boil down to counting the number of zeros on the cheque. It is astonishing to think that at that time it was regarded as wise to allow Chinese investment in advanced telecoms systems and nuclear power – both of which were belatedly rowed back as Beijing’s hostility became impossible to ignore.
A worker works at one of the blast furnaces at British Steel’s steelworks site in Scunthorpe
MI5 Director General Ken McCallum and FBI Director Christopher Wray deliver a joint press conference in central London, where they described China as ‘a massive, shared challenge’
Huawei, the giant Chinese telecoms firm, for example, has now been barred from the UK’s 5G networks out of security fears, but remains deeply embedded in earlier networks and has numerous research tie-ups with British universities.
This month Huawei faces a landmark criminal racketeering trial in New York, charged with stealing technology and trade secrets and committing fraud. Prosecutors allege that it even had a team, the ‘competition management group’, that handed out monthly bonuses to staff who stole the most valuable information from competitors. Huawei denies the allegations. Manchester, where Burnham was mayor for nine years before becoming Prime Minister, has been second only to London among English cities in its enthusiasm for Chinese investors. It was seemingly undeterred by an ugly incident at China’s consulate in the city in October 2022, when a Hong Kong protester was dragged inside and assaulted by staff, including the then Consul-General Zheng Xiyuan. Burnham was criticised for his slow response to the violence but has been quick to court Chinese developers.
Although Burnham has little foreign policy experience, he led a mayoral ‘trade mission’ to China in 2018, during which he boasted: ‘Greater Manchester has long recognised the strategic importance of forging closer ties with China.’
In April he met the current Chinese Consul-General in Manchester, Tang Rui, for ‘in-depth discussions on deepening and expanding practical cooperation’. Invest Manchester, the city’s inward investment promotion agency, boasts of £6 billion of Chinese largesse since 2013. Though as Caroline Knowles writes in her new book Uneasy Streets: How Chinese Money Is Remaking Urban Britain, there is much hype but little transparency around these figures.
She contrasts the ‘grand claims’ of Chinese investment ‘regenerating’ urban centres in London and Manchester with the ‘ramshackle physical evidence’ of empty building sites and holes in the ground.
One flagship Manchester project is Airport City, touted as a £1 billion business hub being developed in partnership with a Chinese state-owned developer called Beijing Construction Engineering Group International (BCEGI).
Yet BCEGI’s troubled UK operation is losing money, cutting jobs and, according to Knowles, has had second thoughts about Airport City, quietly withdrawing and potentially leaving it high and dry – though the company’s website still lists itself as an equity and construction partner in the Airport City project.
Invest Manchester similarly lists BCEGI on its site and told the Daily Mail the text on its page was old. It said it could provide no further information and suggested contacting BCEGI, which did not respond to requests for comment.
There is already evidence that China sees Burnham and Miliband as an easy touch.
Miliband last year signed a memorandum of understanding with Beijing committing the UK to closer cooperation on offshore wind farms, electricity grids, battery storage, carbon capture and hydrogen. The agreement was kept secret for a year and only published in February – raising accusations that Miliband, in his race for net zero, was prepared to hand control of Britain’s decarbonised grid to the CCP. One big test will come in Scotland, where Ming Yang, a Chinese renewable-energy company with close links to the CCP, was blocked by Sir Keir Starmer’s government from building a wind turbine plant in the Highlands because of security concerns. The firm sees the plant as a bridgehead into the European market and has been lobbying – alongside China’s outsize consulate in Edinburgh – to get the ban overturned.
Beijing understands the constitutional faultlines in the UK, and how to poke them. It has won over the ever-gullible Scottish government with slogans of ‘mutual prosperity’ in the face of a self-serving London political establishment.
SNP First Minister John Swinney has accused the UK government of an ‘anti-Scottish move’ and last month called for ‘further examination’ of Ming Yang’s plans.
In effect, the CCP has co-opted the SNP in a campaign threatening national security.
At the same time, Holyrood is spending tens of millions of pounds of taxpayers’ money on buses built in China by a company called Yutong, which has been investigated over alleged ‘kill-switches’ in vehicles that might enable them to be disabled remotely from China. ‘It is a national scandal,’ according to Jo Bamford, chairman of Wrightbus, the UK’s last bus manufacturer.
The UK motor industry is already reeling from news that Jaguar Land Rover is to cut 4,000 jobs, in part the result of competition from cheap Chinese imports.
The heyday in Sino-UK relations was the so-called ‘golden era’ inaugurated by the wide-eyed then-PM David Cameron, pictured with president Xi Jinping in October 2015
The United States and European Union have imposed tariffs on Chinese electric vehicles, accusing Beijing of unfair competition because of state subsidies. But the UK has refused to follow suit, and a clunky Range Rover lookalike called the Jaecoo 7, a hybrid built by a Chinese company called Chery, was the third best-selling car in this country over the first half of the year.
China’s vast Belt and Road Initiative (BRI), ostensibly a global infrastructure investment scheme, but in reality an umbrella for everything China does internationally to extend its influence, is another cautionary tale.
The trillion dollar scheme, which Cameron and Osborne wanted to join, has left a trail of unsustainable debt, especially in poorer countries. It has been accused of fostering large-scale corruption, labour and human-rights abuses and environmental degradation.
There are multiple reasons why Chinese companies acquire assets abroad. Commercial considerations are often low on a list that includes technology theft and strategic takeovers of targets important to the CCP.
When COSCO, a state-owned Chinese shipping giant, took control of debt-ridden Piraeus Port, the largest in Greece, it was revealed that COSCO was six times more leveraged than the ‘troubled’ port it was supposedly rescuing. It was not a commercial decision, but a strategic play – to create what China called a ‘dragon’s head’ for the BRI, referring to the Western-most point of its vast project that snakes across Asia.
While the UK government is now armed with a new security and investment law to scrutinise foreign takeovers, it leaves a great deal to political discretion – and the Burnham government is already showing a worrying gullibility that the CCP is all too adept at exploiting.
- Ian Williams is author of Vampire State: The Rise and Fall of the Chinese Economy.
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