China hits out at British Steel nationalisation as UK seizes control of Scunthorpe plant

Beijing has launched a blistering attack on the UK government’s decision to nationalise British Steel, warning the move has “severely undermined the confidence of Chinese companies investing in the UK”. The Chinese commerce ministry said on Friday it “firmly opposes and is strongly dissatisfied” with the nationalisation, which was pushed through by parliament on Wednesday and enacted on Thursday. The UK government took control of the loss-making steelworks in Scunthorpe last year, but it remained owned by China’s Jingye Group, a structure that limited Whitehall’s ability to steer the business. That changed this week when the government passed legislation allowing it to bring the steel industry into public ownership if a public interest test was met. The business has been haemorrhaging money: Jingye had said it was losing £700,000 a day, and the National Audit Office reported in March that the steelworks was costing the government about £1.3m a day. “Disregarding Jingye’s significant contribution to the UK economy and society, the British side forcibly took control of the company in the name of national security,” the commerce ministry said in a statement carried by the state-backed Global Times. The ministry called on Britain to “faithfully fulfil” its obligations under the 1986 China–UK Bilateral Investment Treaty, a legally binding agreement designed to protect cross-border investments. Jingye is now seeking compensation. The incoming prime minister, Andy Burnham, who will take office on Monday, will have to navigate the diplomatic fallout while weighing the economic benefits of ties with the world’s second-largest economy. Business Secretary Peter Kyle told the BBC the government would need to cover British Steel’s running costs “for the immediate future”, but the long-term plan remains unclear. Beijing said it would “monitor developments closely” and support Chinese firms in protecting their rights, without specifying what measures it might take.