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He is one of three unnamed men who the Met Police suspect of assisting Chinese intelligence services in the UK.
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The men, aged 39, 43 and 68, were arrested in London and Wales as part of a counter-terrorism policing investigation under the National Security Act, the Metropolitan Police said in a statement.
There is no "imminent or direct threat to the public", the Met added, and all three suspects are being held in custody.
Speaking in the Commons after the arrests, security minister Dan Jarvis said the UK would not "trade of security for economic access".
As part of the investigation, searches were carried out at locations in London, East Kilbride and Cardiff.
The men have been accused by officers of assisting a foreign intelligence service under section three of the National Security Act, which was introduced in 2023 to target suspects accused of working against UK interests.
An offence is committed if someone is found to have carried out an act to "materially assist a foreign intelligence service in carrying out UK-related activities", or in conduct likely to assist that service.
Commander Helen Flanagan, head of Counter Terrorism Policing London, said the force had seen a "significant increase" in national security casework in recent years, but officers were working to "disrupt malign activity where we suspect it".
Jarvis said if Chinese interference in UK sovereign affairs were proven, "severe consequences" would be imposed.
"This government stands resolute in our resolve to counter foreign interference activity targeting the UK from any state actor," he told MPs.
British officials had informed Chinese counterparts in London and Beijing about the allegations, he added.
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