By Damian Grammaticas | BBC News | August 4, 2025

An ambitious plan by China to build Europe’s largest embassy on the historic site of the former Royal Mint in London is sparking serious political, security, and public backlash. At the heart of the dispute are fears over surveillance, political intimidation, and espionage.

A “Wanted” Poster and a Personal Story

The tension surrounding the proposed site intensified when a bounty poster emerged, offering HK$1 million (around £95,000) for information on Carmen Lau, a 30-year-old pro-democracy activist who fled Hong Kong in 2021. The poster urges informants to hand her over to the Chinese embassy—a building she now avoids.

“I’ve never been this close,” Carmen said while standing outside the planned embassy. She fears the embassy could be used to intimidate dissidents or even detain them, adding, “It’s easy for me to imagine what would happen if I was taken there.”

Lau, once a Hong Kong district councillor, left after refusing to pledge loyalty to China under a new national security law. She believes she remains a target, citing surveillance and harassment from Chinese state media, as well as arrest warrants issued in Hong Kong accusing her of inciting secession and colluding with foreign powers.

A Site of Historic and Strategic Importance

China purchased the Royal Mint Court for £255 million in 2018. Situated across from the Tower of London and near the City’s financial district, the 20,000-square-meter site would house embassy offices, a cultural centre, and accommodation for 200 staff.

However, hidden within the plans are basement rooms with unspecified uses, raising questions about their intended function.

Security experts and critics fear the embassy’s location offers strategic proximity to fibre optic infrastructure, potentially enabling surveillance or cyber-espionage. The site previously housed Barclays Bank’s trading floor and sits near a tunnel with telecoms cables critical to London’s financial operations.

According to former U.S. security officials, data interception from such cables could be executed using undetectable technology from up to half a mile away.

Local and Political Opposition

Nearby residents and former officials are raising concerns over security, privacy, and the risk of being caught in potential attacks targeting the embassy. Mark Nygate, a long-time local resident, worries the embassy’s presence will increase tension and surveillance in the area.

Protests by Hong Kongers, Tibetans, Uighurs, and political opponents have already drawn crowds of up to 6,000.

Yet some experts, such as Prof. Tony Travers of the LSE, argue that protests are not likely to be more disruptive than those faced by other embassies in London. He suggests the fears, while valid, may be overstated.

Espionage Concerns and Political Implications

The Chinese embassy denies all accusations, calling the concerns “anti-China smears” meant to interfere with planning decisions. It insists the new facility would promote mutual understanding and benefit the local community.

Still, senior figures in both the UK and the U.S. remain wary. British Conservative MP Kevin Hollinrake and several U.S. Republicans have voiced concerns about espionage risks tied to the embassy’s location.

Steve Tsang, Director of the SOAS China Institute, believes it’s unlikely China would detain individuals inside the embassy. But he does expect some embassy staff to monitor dissidents and cultivate influence over academics, scientists, and business figures.

From Local Rejection to National Decision

The local council originally rejected China’s application in 2022, citing safety and tourism concerns. Instead of appealing, China refiled the same application in August 2024, shortly after the Labour Party came to power.

Following a call between Prime Minister Sir Keir Starmer and Chinese President Xi Jinping, Deputy Prime Minister Angela Rayner took control of the planning process—prompted by Foreign Secretary David Lammy—removing it from local authority hands.

This move comes as Labour attempts to recalibrate the UK-China relationship after years of turbulence. The government is trying to balance economic interests with growing concerns over cyber threats and human rights abuses.

A Symbol of Long-Term Choices

Lord Peter Ricketts, former chair of the UK’s National Security Council, highlights the dilemma: should the UK prioritize security concerns or preserve a long-term diplomatic and economic relationship with China?

“China is both a threat and a necessary partner,” Ricketts says. “There are acute dilemmas and no easy answers.”

Prof. Tsang adds that granting or denying the embassy won’t likely alter Chinese investment flows significantly. “China won’t stop selling electric vehicles because of this. Nor will they suddenly increase investment just because the embassy is approved.”

However, he sees some practical benefit in consolidation. “Having all Chinese officials in one place may actually make monitoring them easier.”

The Final Call

Deputy PM Angela Rayner now faces a critical decision. She must weigh the benefits of diplomatic engagement against the real possibility of security risks—including potential eavesdropping on the UK’s financial core.

Whatever choice is made, it will reflect the UK’s broader strategy on how to navigate an increasingly complex relationship with an assertive China.