**China Warns UK Over British Steel Nationalisation, Calls for Fair Resolution**
On July 18, 2026, the UK government announced the nationalisation of British Steel, a move aimed at safeguarding the country's steelmaking industry. This decision has drawn a sharp response from China, which previously owned the steelmaker through Jingye Steel.
The UK government’s action comes after a prolonged period of financial difficulties for British Steel, which has been under Jingye's ownership since 2020. The Chinese company purchased the steelmaker for £70 million ($94 million) but reported significant losses, claiming it was losing approximately £700,000 ($942,000) daily by 2025. Concerns about the sustainability of the operations intensified after Jingye conducted a consultation in March 2025, concluding that the furnaces were not financially viable. Following this, the company cancelled orders for a critical material needed for steel production, raising fears of a potential shutdown of the Scunthorpe plant.
British Steel is crucial for the UK’s industrial landscape, representing the only source of primary steelmaking in the country. The plant supports about 2,700 jobs directly and thousands more across its supply chain. The UK government emphasized that the nationalisation was necessary to protect jobs, secure supply chains, and ensure national security, particularly as the closure of the Scunthorpe facility would leave Britain as the only G7 nation without the capacity to produce virgin steel.
In response to the UK’s decision, China’s Ministry of Foreign Affairs expressed significant concern, stating that it would closely monitor the situation. The ministry highlighted that how the UK handles the nationalisation could impact Chinese investors' confidence in the UK market and influence perceptions of the British government’s credibility in China. The ministry urged the UK to pursue a mutually acceptable solution, which includes considerations for compensation to Jingye for the losses incurred from its investment in British Steel.
Jingye has also indicated its desire for compensation, reflecting the broader implications of the UK’s move on international investment relations. The Chinese steelmaker's investment in British Steel was seen as part of a larger trend of Chinese companies investing in UK industries, and the nationalisation raises questions about the future of such investments.
The UK government’s decision to take British Steel into public ownership marks a significant shift in its approach to industrial policy, particularly in the context of national security and economic stability. As the situation unfolds, it remains to be seen how both the UK and China will navigate the complexities of this nationalisation and its implications for international trade and investment.
The nationalisation of British Steel is part of a broader strategy by the UK government to secure its industrial base amid global economic uncertainties and challenges in the steel sector. With ongoing discussions about compensation and the future of the plant, the situation is poised to evolve, highlighting the intricate balance between national interests and international business relations.