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A Chinese state-owned car company is hoping to secure subsidies from Britain to build an assembly plant, which is likely to raise new safety concerns.
Chery is considering where to build a European factory, with Britain a possible option, along with Spain, Hungary and the Czech Republic.
It comes amid warnings about the threat posed by China, with Britain and the US recently identifying the country as the source of a wave of cyber attacks.
US President Joe Biden has warned that Chinese vehicles could pose a national security risk and launched a sweeping investigation to determine whether they could be used for espionage.
But British Investment Secretary Dominic Johnson has previously expressed his ambition to persuade a Chinese carmaker to build a factory in Britain.
Assembly plant: Chinese car giant Chery is considering where to build a new European factory, while Britain is a possible option, along with Spain, Hungary and the Czech Republic
That could mean the government – which has earmarked £2 billion to boost the car industry – offering multi-million pound grants of the kind it has already handed out to the likes of Tata and BMW.
Victor Zhang, the UK boss of Chery grant 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 about building a new battery site for electric vehicles in Coventry.
China has gained a lead in electric vehicle technology – at a time when traditional carmakers are still struggling to adapt to the phase-out of petrol and diesel.
That means the country is seen by British industry insiders as the most likely source of investment in a new car factory in Britain.
But U.S. officials have taken a much more cautious approach. And established automakers worry that China could flood Western markets with cheap cars.
Zhang brushed aside 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.
“Wherever we go, we will adhere to local policies, otherwise you can’t continue doing business.”
But Professor Jim Saker, chairman of the Institute of the Motor Industry, which represents professionals in the sector, said other countries had turned away Chinese carmakers over security concerns and quoted comments from the head of MI5 about the threat posed by the country.
‘Why does the British government want to subsidize a Chinese manufacturer when Ken McCallum, the head of MI5, says Chinese espionage in Britain is operating on an “epic scale”?’ Saker asked.