The Chinese commerce ministry has formally hit out at the British government’s decision to nationalize British Steel, stating that Beijing is strongly dissatisfied with the move. The ministry declared on Friday that the action taken by the UK government "seriously infringed upon Jingye's legitimate rights and interests" and warned that it has severely undermined the confidence of Chinese companies currently investing within the United Kingdom.
The UK government announced on Thursday that it would take the struggling, loss-making steel firm into public hands, citing the need to safeguard a "vital national capability" and protect jobs. While the UK had already taken control of the Scunthorpe-based operations last year, the company remained under the ownership of China’s Jingye Group, a structure that effectively limited the government's ability to direct the firm's future. The nationalization follows the passage of legislation in Parliament on Wednesday, which granted the government the power to bring the steel industry into public ownership provided it satisfied a public interest test.
Beijing has called upon Britain to "faithfully fulfil" its obligations under the China–UK Bilateral Investment Treaty. In a pointed statement, the commerce ministry accused the UK of "disregarding Jingye's significant contribution to the UK economy and society" and claimed the government had "forcibly took control of the company in the name of national security." Although Beijing stated it would monitor the situation closely and support Chinese firms in protecting their rights, it did not specify what those protective measures might entail.
The development creates a diplomatic challenge for the incoming Prime Minister, Andy Burnham, who is set to take office on Monday. He must now balance the complexities of this international dispute with the broader economic benefits of maintaining ties with the world’s second-largest economy. Meanwhile, Jingye is reportedly seeking compensation for the takeover. The business has faced significant financial pressure, with the National Audit Office noting in March that the Scunthorpe works was costing the government approximately £1.3m a day, while Jingye had previously indicated the business was losing £700,000 daily. Business Secretary Peter Kyle confirmed that the government would need to cover the plant's running costs for the immediate future, though long-term state operation is considered unlikely given the high daily financial burden.
