China's Ministry of Commerce has criticized the UK government for its recent nationalization of British Steel, which was owned by Chinese firm Jingye Group. The takeover completed on July 16 involved the UK seizing control of its last primary steelmaking plant, based in Scunthorpe, marking a significant step amid ongoing operational losses.
Background of British Steel Nationalization
Jingye Group acquired British Steel in 2020 and invested over £1.2 billion (approximately $1.6 billion) into its operations. Despite efforts, the facility was losing about £700,000 daily. When Jingye considered shutting blast furnaces to stem losses, the UK government intervened first with the Steel Industry (Special Measures) Act in 2025, enabling operational control, and then formally nationalized the company through legislation enacted this month.
Diplomatic and Investment Implications
Jingye initiated compensation talks under the UK-China bilateral investment treaty in June, seeking recompense for its investments and loss of control. An independent valuation is underway to decide the compensation amount. Beijing condemned the move as a "forced takeover," warning that it undermines confidence among Chinese investors in the UK and may set a concerning precedent.
Observers suggest this event could influence foreign investor sentiment beyond China, potentially impacting wider international investments. The case signals strained China-UK investment relations amid changing industrial policies.
The announcement from China came just days after the UK government completed the transfer of ownership, sparking attention in diplomatic and financial circles.
Following the nationalization news, market reactions have been mixed, reflecting uncertainty about the future operations and investment climate surrounding British Steel.
