An internal investigation into allegations that Sheffield Hallam University bowed to sustained pressure from Chinese actors has been escalated to counter‑terrorism police after documents showed threats tied to efforts to halt Xinjiang research. University emails obtained by Professor Laura Murphy detail demands that sensitive forced‑labour work be stopped and indicate that access to Chinese student markets played a role in the decisions. South Yorkshire Police said the case was referred under Section 3 of the National Security Act, which covers conduct that could materially assist a foreign intelligence service. Sheffield Hallam apologised to Professor Murphy and reversed an earlier decision that had barred her from China‑related research after she launched legal action alleging infringement of academic freedom. The episode raises questions for research offices, international recruitment teams and risk managers at U.K. and U.S. universities about balancing academic freedom, staff safety, and commercial ties with authoritarian states. Officials and legal experts warn institutions must document decisions and strengthen protections for scholars working on geopolitically sensitive topics.