China condemns UK takeover of British Steel

China condemns UK takeover of British Steel

The United Kingdom has nationalized British Steel, seizing formal control of the business from its Chinese owner, Jingye Group. The move, announced Thursday, has triggered a sharp diplomatic response from Beijing, which accuses the British government of violating investment protections and undermining the confidence of foreign investors.

China’s Ministry of Commerce (Mofcom) stated it is strongly dissatisfied with the decision and firmly opposes the action. A ministry spokesperson claimed the UK government forcibly took control of the company under the guise of national security while disregarding the contributions Jingye Group made to British society and the economy.

The British government maintains the takeover was essential to preserve a vital national industrial capability and protect the future of domestic steel production. Ministers argued that the Scunthorpe plant must remain operational because it is the only UK producer of specific grades of virgin steel necessary for construction and rail infrastructure projects.

This nationalization marks the first time the company has been under public ownership since 1988. The move follows legislation approved by Parliament that allows the government to bring steel companies into public ownership when it serves the public interest.

The transition to full ownership follows a period of partial control. In April 2025, the government took operational control of the Scunthorpe steelworks to prevent the shutdown of blast furnaces. That move was intended to protect 2,700 jobs at the plant and thousands of additional roles within the supply chain. However, because ownership remained with Jingye Group until this week, ministers found their ability to determine the company's long-term future limited.

The financial state of the company has been a point of contention. Jingye Group previously stated that British Steel had been losing approximately £700,000 every day. In June, the company demanded compensation for losses related to investments made before the government assumed operational control. Meanwhile, the National Audit Office reports that the plant is already costing taxpayers an estimated £1.3m per day.

Beijing has urged Britain to honour its obligations under the China–UK Bilateral Investment Treaty, also referred to as the China-UK Investment Protection Agreement. Mofcom warned that the takeover deals a severe blow to the confidence of Chinese companies investing in the UK. The ministry stated it will closely monitor developments and support Chinese firms in safeguarding their rights through legal means, though it did not specify what those measures would entail.

The dispute arrives during a transition in British leadership.

"British Steel is part of the fabric of our nation and a cornerstone of Britain's industrial strength. Today's decision secures the future of steelmaking in the UK, protects skilled jobs and safeguards a vital national capability."

Sir Keir Starmer via Yahoo

Andy Burnham is scheduled to become Labour leader on Friday and prime minister on Monday. The nationalization of British Steel is expected to be one of his first diplomatic tests as he balances national industrial priorities with the need to maintain economic ties with China.

The British Steel takeover may signal a broader trend toward public ownership under the incoming administration. Mr. Burnham is expected to expand public ownership into energy and water industries. One pending decision involves the heavily indebted Thames Water, which Mr. Burnham may place into special administration, a process described as a form of temporary nationalization.