China has hit out at the nationalisation of British Steel, saying it "firmly opposes and is strongly dissatisfied with the British government's decision". The UK government said the move was intended to protect jobs and safeguard a vital national capability.
British Steel’s Scunthorpe works, taken into public hands last year, had been owned by China’s Jingye Group, limiting the government’s ability to direct its future.
China’s commerce ministry said the nationalisation "seriously infringed upon Jingye’s legitimate rights and interests and severely undermined the confidence of Chinese companies investing in the UK".
The ministry called on Britain to "faithfully fulfil" obligations under the China–UK Bilateral Investment Treaty, stating that the forced takeover was conducted in the name of national security.
Beijing will monitor developments closely and support Chinese firms to protect their rights, though it has not outlined specific actions.
The decision to nationalise British Steel threatens to strain relations between London and Beijing just as the incoming UK prime minister will need to balance economic benefits of ties with the world’s second‑largest economy.
Britain’s government has held negotiations with Jingye, but the spokesperson said it was impossible to reach an agreement that represented value to the taxpayer. It confirms it remains open to Chinese investment.
The parliament passed legislation allowing the government to bring the steel industry into public ownership when it meets a public interest test. Jingye now seeks compensation, after reporting a loss of £700,000 a day and has yet to respond to the announcement of nationalisation.
Small Business Minister Blair McDougall noted the government will appoint an independent valuer in the autumn to assess compensation, which could be nil. Although the government’s long‑term strategy is to shift domestic steel production to electric arc furnaces, the Scunthorpe plant provides outputs that are not yet produced elsewhere in Britain, particularly needed by Network Rail and the building industry.
Britain’s steel industry has historically relied on imports; losing the plant would leave the UK as the only G7 nation unable to produce its own steel. Thus the government has decided to keep Scunthorpe open until alternatives are available while it evaluates the future of the facility.
British Steel was last under state ownership in 1988 before being privatised by Margaret Thatcher’s government.
