China rebukes UK as British Steel is formally nationalised

The United Kingdom has formally taken ownership of British Steel, the country's last working steelworks, after months of concern that its Chinese owner could shut the plant down. The move gives the government direct control over the Scunthorpe site, which has been at the centre of a dispute over jobs, industrial policy and national security. Beijing has responded by saying the decision has severely undermined confidence among Chinese companies considering investment in the UK.

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British Steel supports about 2,700 jobs across its main steelworks and the wider supply chain, and it is the UK's only source of primary steelmaking. The company was bought by Jingye in 2020 for £70 million, but by 2025 the business said it was losing £700,000 a day. In March 2025, Jingye carried out a consultation that concluded the furnaces were not financially sustainable, and the following month it cancelled orders for a key material used in the steelmaking process, prompting fears of a shutdown.

The UK government had already seized operational control of British Steel from Jingye in April 2025 to prevent the blast furnaces from being closed, while ownership remained with the Chinese company. On Thursday, ownership officially transferred to the UK government, which said it would appoint an independent valuer to assess whether compensation is payable to Jingye. China's Ministry of Commerce said on Friday that the expropriation seriously damaged Jingye's legitimate rights and interests and urged the UK to meet its obligations under the China-UK Investment Protection Agreement.

The case matters beyond one steel plant because British Steel is a strategic industrial asset and a test of how far governments will go to protect critical manufacturing capacity. The UK has argued that public ownership was necessary to safeguard a national interest, while China has framed the move as a warning sign for investor confidence. The dispute also comes against a wider backdrop of scrutiny over foreign ownership of sensitive infrastructure and the balance between open investment and economic security.

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British Steel's nationalisation has been in preparation for more than a year, reflecting the scale of the financial and political pressure around the plant. The government has faced the challenge of keeping the furnaces running while also deciding what long-term structure, if any, should replace private ownership. The company's future is tied not only to steel production in Scunthorpe but also to the wider supply chain that depends on the site.

What remains unclear is how much compensation, if any, Jingye will receive and how long the government intends to keep British Steel in public hands. It is also not yet clear whether Beijing will take any further steps beyond its formal protest. The next developments to watch are the valuation process, the operational outlook for the plant and whether the dispute affects broader UK-China economic ties.

China has sharply criticised the United Kingdom's decision to nationalise British Steel, saying it firmly opposes the move and is strongly dissatisfied with it. The dispute centres on the steelworks in Scunthorpe, where the UK government has taken control of operations to protect jobs and what it has described as a vital national capability. Beijing said the decision undermines confidence in Chinese investment in the UK and infringes the rights and interests of Jingye Group, the Chinese owner of British Steel.

The UK government said on Thursday that bringing the loss-making company into public hands was necessary to safeguard the future of the plant. Parliament had passed legislation on Wednesday allowing ministers to take steel assets into public ownership when a public interest test is met. China's commerce ministry responded on Friday that Britain had acted in the name of national security and called on London to faithfully fulfil its obligations under the China-UK Bilateral Investment Treaty.

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The ministry said it would monitor developments closely and support Chinese firms in protecting their rights, although it did not say what that support might involve. Jingye has sought compensation and had previously said the business was losing £700,000 a day. The UK government has also faced the prospect of continuing heavy costs, with the National Audit Office saying in March that the Scunthorpe steelworks was costing about £1.3 million a day.

The nationalisation has wider significance because British Steel is tied to both industrial policy and the broader relationship between London and Beijing. The UK has argued that public ownership was needed to preserve a strategic industrial asset, while China has framed the move as a breach of investor confidence. The disagreement comes at a time when governments in both countries are weighing the economic value of bilateral ties against concerns over national security and control of critical infrastructure.

British Steel has been under UK operational control in Scunthorpe since last year, although it remained owned by Jingye Group until the latest move. That arrangement limited the government's ability to direct the company's future, according to the report. The latest decision gives ministers the power to decide the plant's next steps while keeping the blast furnaces running, but officials have indicated they are unlikely to want to run the business permanently.

What remains unclear is how Beijing may respond beyond its warning that it will watch developments closely. It is also not yet clear what compensation, if any, will be agreed with Jingye or how long the government will keep the plant in public hands. The immediate focus will be on the future of the Scunthorpe site, the cost to the public purse and whether the dispute affects wider UK-China economic relations.

#BritishSteel #Jingye #UKgovernment #ChinaMinistryofCommerce #Scunthorpe