China’s government has said it is “strongly dissatisfied” with the decision to nationalise British Steel this week, 15 months after the UK government intervened to prevent the closure of its steelworks in Scunthorpe and the loss of 4,000 jobs.
On Thursday, British Steel was brought under public ownership to protect “the future of steel production”, the government announced.
The Department for Business and Trade said the move was essential to maintain steel production at the company’s site in Scunthorpe, Lincolnshire, to protect the company’s future and UK supply chains.
However, China’s Ministry of Commerce (Mofcom) said the move dealt “a severe blow to Chinese companies’ confidence in investing in the UK”.
British Steel was previously owned by the Chinese company Jingye. The Labour government stepped in with an emergency recall of parliament to prevent the closure of British Steel in April last year, after Jingye threatened to walk away without taking steps to preserve the blast furnaces in Lincolnshire.
A Mofcom spokesperson told the Chinese media outlet Global Times: “The UK side, disregarding Jingye Group’s important contributions to the British economy and society, forcibly took control of British Steel and subsequently nationalised the company in the name of national security, seriously undermining Jingye’s legitimate rights and interests and dealing a severe blow to Chinese companies’ confidence in investing in the UK.
“China firmly opposes and is strongly dissatisfied with the UK government’s decision. China will closely follow developments, support Chinese companies in safeguarding their rights through legal means, and take strong measures to firmly protect the interests of Chinese companies.”
Jingye has argued in its UK accounts and in statements on its WeChat social media account that British Steel was a valuable asset worthy of large compensation even though it had been prepared to walk away and let it fail.
The government plans to appoint an independent valuer to work out what compensation should be paid to Jingye, in an effort to forestall legal action under international treaties.
The Mofcom spokesperson reportedly said the UK government should “abide by relevant international rules, earnestly fulfil its obligations under the China-UK bilateral investment treaty, treat Chinese companies operating in the UK in a fair and impartial manner, and fully protect their legitimate rights and interests”.
After Thursday’s nationalisation a new leadership team was appointed to focus on stabilising the business and turning it into a “commercially sustainable, low-carbon enterprise”, the UK government said.
Keir Starmer – in one of the last significant actions overseen by him as prime minister – confirmed the nationalisation on Thursday and said: “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.
“This government will always act in the national interest to support British industry, strengthen our economy and ensure the industries we rely on can thrive long into the future.”
The announcement followed the Steel Industry (Nationalisation) Act 2026 receiving royal assent and becoming law. The new law allows ministers to transfer steel businesses’ shares or property into public ownership.
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The nationalisation of British Steel is the latest geopolitical flashpoint between the UK and China. Earlier this year Starmer travelled to China in an effort to bring “stability and clarity” to relations between the two countries after years of what he described as “inconsistency”.
Last year the government finalised a £38bn deal to back Britain’s biggest nuclear project, Sizewell C, after easing out China General Nuclear, which had held a 20% stake, in 2021 over security fears.
In 2020, Boris Johnson angered China by ordering that equipment made by Huawei be stripped out of Britain’s 5G phone networks.
While Donald Trump praised the decision – the US had piled political pressure on countries to ban Huawei citing national security concerns – China’s ambassador to the UK criticised the move, saying it made it “questionable whether the UK can provide an open, fair and non-discriminatory business environment for companies from other countries”.
The two countries have also enjoyed better relations in the past, most famously when David Cameron took Xi Jinping to a pub in 2015.
A year later the Chinese company SinoFortone Investment acquired the 16th-century Buckinghamshire pub, which had become something of a tourist attraction for Chinese visitors after the visit.
PA Media contributed to this report.
