The Chinese government has condemned the UK's decision to nationalise British Steel, citing concerns over investment confidence and the treatment of Chinese-funded enterprises.
Key facts
- •The UK government took control of British Steel to protect approximately 2,700 direct jobs in Scunthorpe.
- •China’s Ministry of Commerce warned the nationalisation damages Chinese companies' confidence in investing in the UK.
- •The Scunthorpe plant is the last facility in the UK capable of producing virgin steel from raw materials.
- •The government will appoint an independent valuer in the autumn to assess potential compensation for Jingye.
- •The UK steel industry contributed £1.7 billion to the national economy in 2024, representing 0.1% of total economic output.
The Chinese Ministry of Commerce has expressed strong opposition to the UK government's decision to take British Steel into public ownership. Announced on Thursday, the move aims to safeguard jobs and maintain domestic steel production capabilities at the company's Scunthorpe plant. China’s commerce ministry warned that the action damages investor confidence and accused the UK of disregarding the capital contributions made by the Chinese owner, Jingye, since its acquisition of the firm.
By the numbers
Government Rationale and Operational Control
The UK government moved to nationalise British Steel following legislation passed by Parliament that allows for public ownership under a public interest test. Business Secretary Peter Kyle stated the takeover is intended to stabilise the business and protect the national interest, particularly regarding steel supply for major construction and defence projects. The Scunthorpe site is currently the only facility in the UK capable of producing virgin steel from raw materials. While the government has now assumed operational control, it faces significant ongoing costs. Reports indicate the plant has been losing over £1 million a day, with the National Audit Office previously estimating costs at approximately £1.3 million daily. The government plans to appoint an independent valuer in the autumn to determine if any compensation is owed to Jingye, noting that such compensation could potentially be set at nil.
Chinese Response and Investment Concerns
In a statement released on Friday, China’s Ministry of Commerce urged the UK to fulfill its obligations under the China-UK investment protection agreement and treat Chinese enterprises fairly. The ministry argued that Jingye had injected substantial capital into the company to preserve jobs after years of losses under previous ownership. Officials stated they would monitor the situation closely and support businesses seeking legal recourse to protect their interests. Jingye, which retained ownership of the company despite the government taking operational control of the Scunthorpe blast furnaces in 2025, has previously reported daily losses of £700,000. The UK government intends to keep the furnaces running until alternative production methods, such as electric arc furnaces, are viable, as the plant produces specific steel types currently unavailable elsewhere in the country.
Timeline
- 1988British Steel was last under state ownership before being privatised.
- 2025The UK government took operational control of Scunthorpe's blast furnaces.
- WednesdayParliament passed legislation allowing the government to bring the steel industry into public ownership.
- ThursdayThe British government announced the nationalisation of British Steel.
- FridayChina’s Ministry of Commerce issued a formal statement opposing the nationalisation.
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This article was independently rewritten by ManyPress editorial AI from reporting originally published by Euronews Business, BBC Business, BBC Business.
