UK firms Fidelity and BlackRock invest millions in Chinese spying giant

Some of the UK’s largest finance firms have pumped millions of pounds of savings into a Chinese surveillance company accused of complicity in the persecution of Uyghur Muslims, The Mail on Sunday can reveal.

HSBC, Legal & General and BlackRock are among the financial giants that poured investor money into Zhejiang Dahua Technology, which is backed by the Chinese state.

Dahua, which makes high-tech CCTV cameras, was one of several companies named in a report last week warning of the risks posed by British police forces using Chinese surveillance technology.

China has been accused of committing crimes against humanity in its treatment of the Uyghur people in the northwestern region of Xinjiang.

Ethical and safety concerns have been raised following reports that Dahua has developed facial recognition software that can detect ethnicity and alert police to the presence of Uyghur Muslims.

Dahua has more than ten UK-based institutional investors. Fidelity International holds the largest stake with 22 million shares, followed by BlackRock Advisors UK with nearly 3 million, according to data from Refinitiv. HSBC, Aviva, Abrdn and L&G also have stakes, albeit much smaller.

Tory MP Bob Seely, a member of the Foreign Affairs Committee, said: “All these companies that invest in these Chinese companies doing unethical things will regret it because it will damage their reputation. Honestly, to invest in a company that ethnically monitors people is a pretty ugly business to work in. It’s just not good. I’m sure there are easier and better ways to make a profit.’

Professor Fraser Sampson, the czar of British surveillance, revealed last week that Chinese-made camera systems – including Dahua’s – were being used across Britain.

Prof Sampson warned that people should be more concerned about Chinese CCTV cameras than spy balloons high in the sky. His audit was conducted by the Office of the Biometry and Surveillance Camera Commissioner.

Dahua has been blacklisted by the US government since 2019 for allegedly supporting a state-sponsored campaign of “repression, mass arbitrary detention and high-tech surveillance against Uyghurs.”

Listed on the Shenzhen Stock Exchange since 2008, the company is one of the world’s largest surveillance equipment manufacturers.

In addition to naming Dahua, the Sampson report also pointed to Hikvision and Huawei in China. Some of the stakes in Dahua held by British savings giants such as those of Aviva and Abrdn are in “passive” funds, which hold a basket of stocks that track a stock index.

This means that the fund manager does not make an active decision to invest in Dahua, but that the participation comes as part of the basket.

Investment giant Schroders is said to have dumped large stakes in both Hikvision and Dahua last year due to ethical concerns.

Mark Johnson, from Big Brother Watch, said: ‘The fact that UK financial services are benefiting from Chinese state surveillance companies is deeply concerning. These are companies whose products are associated with serious human rights violations, ethnic persecution in China and national security risks to the UK.

‘The UK is dominated by Chinese-made Hikvision and Dahua cameras.

British money should not go near companies involved in genocide and modern slavery. The UK should follow the US lead and push our financial sector to divest from these technologies that abuse rights.”

In July 2021, the foreign affairs committee in parliament published a report stating that ‘equipment manufactured by companies such as Hikvision and Dahua should not be allowed to operate in the UK’.

This was part of an effort to stop British companies from “providing blueprints or funding for further technology-assisted human rights violations.”

Tensions between China and the West are running high over claims that the country has detained more than a million Uyghurs, who were reportedly the target of mass surveillance.

There are also growing concerns that Chinese CCTV poses a security risk in Britain and fears are growing that it could give Beijing’s ruling Communist Party access to data on British citizens.

Findings published last week by Prof Sampson revealed that 18 police forces in the UK are guarding high streets and other public areas using CCTV cameras made by Chinese companies related to security or ethical issues. He expressed concern that police forces were being “shot through” with cameras, drones and license plate readers from Chinese operators.

All investment firms mentioned in this article have been approached.

Fidelity said: “We have found our Chinese companies to be very receptive to our active involvement and have adjusted their policies accordingly.”

A spokesperson for Legal & General said: “LGIM manages many index funds against a range of different index providers to meet a wide variety of different client requirements.”

Abrdn said it has “no exposure to Dahua in any of its actively managed portfolios.”