A Chinese steelmaker’s attempt to use British Steel as a foothold in Western markets has turned into a political dispute, after the UK government introduced a bill that could nationalize the eastern England-based company.
Jingye Group, a privately owned steelmaker based in Hebei province, acquired British Steel for £70 million (US$91 million) in 2020, partly in the hope that owning production capacity inside Britain would help it bypass US tariffs on Chinese steel. In June 2018, the Trump administration imposed an initial 25% tariff on steel imports from China, citing national security concerns under the Trade Expansion Act.
The Chinese company said it had invested £1.2 billion in British Steel, but it still failed to turn around annual losses estimated at £250 million, due largely to high electricity costs in the UK and an influx of cheap Chinese steel.
The most devastating development came in March 2025, when the Trump administration imposed 25% tariffs on all steel and aluminum imports worldwide, including those from the UK. The move came as Washington found that Chinese steelmakers had been acquiring foreign steel mills to circumvent US tariffs.
Jingye said in the same month that the Scunthorpe steelworks were losing £700,000 a day and were no longer financially sustainable. It also rejected a £500 million state rescue package. The UK Parliament passed emergency legislation on April 12, allowing the government to take control of British Steel’s blast furnaces, prevent their closure, and secure the raw materials needed to keep them operating.
At that time, Prime Minister Keir Starmer said the move was aimed at saving British Steel and protecting more than 2,700 jobs in Scunthorpe.
On May 14 this year, the UK government said it would introduce the Steel Industry (Nationalization) Bill, which would give ministers the power to nationalize steel companies such as British Steel if a public-interest test is met. The bill was scheduled for its first reading in Parliament that day, with the government saying it would provide a route to bring steel companies into public ownership where necessary.
“Revitalizing our steel sector is a top priority for this country and this is an important first step to safeguard our steelmaking capability, which would allow us to secure the future of British Steel and explore possible options to modernize the industry,” Industry Minister Chris McDonald said.
McDonald said the bill’s early progress through Parliament showed the government was serious about securing Britain’s domestic steel production.
“The British government should uphold fairness, impartiality and non-discrimination, act cautiously in its decisions, and safeguard the legitimate rights and interests of Chinese enterprises,” said a spokesperson of China’s Ministry of Commerce.
The spokesperson said the British government had been in control of British Steel for more than a year since taking it over from Jingye, and that any action by Britain should fully consider the substantial investment made by the Chinese company in the British steel industry and its contribution to the British economy and society.
The spokesperson called on Britain to respect Jingye’s wishes and market principles, seek “a fair, just solution acceptable to both sides” and said China would take firm measures to protect the legitimate rights and interests of Chinese enterprises.
“Since 2018, China’s steel industry has accelerated its deployment of ‘non-dollar channels,’” a Jiangxi-based columnist using the pen name “Ganjiang Top List” says in an article. “European countries, including Britain, have advanced craftsmanship and talent but lack capital and supporting facilities. They became a natural springboard for Chinese industrial chains going global.”
“British Steel was not acquired by Jingye for production, but for connection,” he says. “The acquisition helped China to create an export path for parts and engineering services in Europe’s automotive, rail transport and energy-equipment sectors.”
He says Jingye also transferred part of its digital dispatching platform to British Steel after the acquisition, in an effort to reshape the cost structure through unified platform management and energy optimization – but these efforts ultimately failed.
The columnist says Chinese enterprises must face reality and adjust their overseas strategy by avoiding controlling stakes in key sectors. He says they should rely on technical services, short-term leasing and non-controlling cooperation to maintain a presence while reducing political risk.
He says that, in the case of Jingye’s acquisition of British Steel, the real damage is not only the loss of capital but also the loss of Chinese firms’ reputations.
Industrial vandalism
Britain was once the workshop of the world, with its coal, iron ore, steam engines and railways helping drive the Industrial Revolution. From the 19th century onward, British iron and steel supported rail networks, shipbuilding, bridges and the production of machinery and weapons, making the sector a symbol of the country’s industrial power and imperial reach.
China began to catch up with Britain during its reform-era industrial expansion in the 1980s and 1990s, then pulled far ahead after joining the World Trade Organization in 2001. Rapid urbanization, infrastructure development and manufacturing growth turned China into the world’s dominant steel producer, but also created chronic overcapacity, flooding global markets with cheap steel.
That added pressure on older British producers already burdened by high labor costs, expensive energy, aging plants and repeated cycles of nationalization and privatization.
British Steel itself was created by nationalization. It was formed in 1967, when the UK government brought the country’s main steel companies into public ownership. It became one of Europe’s largest steelmakers, supplying railways, construction, carmakers and heavy industry. But it later struggled with falling demand, labor disputes, aging plants and foreign competition. After privatization in 1988, the business changed hands several times before collapsing into insolvency in 2019 and being rescued by Jingye in 2020.
British Steel remained loss-making under Jingye. It reported a post-tax loss of £227 million in 2023, down from £367 million in 2022, and said losses continued into 2024. Its claim in March 2025 that Scunthorpe was losing £700,000 a day would equal about £255.5 million over a full year.
In April last year, GMB union general secretary Gary Smith said British workers were legitimately worried about sabotage and what he called industrial vandalism at the site.
Conservative Party leader Iain Duncan Smith also suspected Beijing of interference in British Steel, while Business Secretary Jonathan Reynolds said that Chinese firms should be excluded from “very sensitive” industries in the UK.
“At a time when the United States is using tariffs against countries including Britain and pursuing unilateralist and protectionist trade bullying, some British politicians are attacking China’s government and Chinese companies instead of criticizing Washington,” said a spokesperson for the Chinese Embassy in the UK. “What exactly are they trying to achieve?”
The spokesperson said British Steel had already suffered years of losses and entered insolvency before 2020, while Jingye’s funding had kept the company alive and helped protect workers’ jobs.
“Any words or actions that politicize commercial issues and engage in malicious hype will damage Chinese enterprises’ confidence in investing in the UK and harm China-UK economic and trade cooperation,” the spokesperson said.
£1 billion or £100 million?
In March this year, Jingye was reportedly seeking about £1 billion in compensation from the UK government, saying it had put £1.2 billion into British Steel since 2020, while local media reported that London’s proposed settlement was understood to be below £100 million.
The “investment” claim has also been disputed, as public filings reportedly showed Jingye and related companies had provided British Steel with £735.7 million in loans as of 2023 and charged tens of millions of pounds in interest, although a Jingye spokesperson said the £1.2 billion was a mix of equity and low- or zero-interest loans used to support operations.
A Henan-based columnist said Britain should not risk stable China-UK trade ties for the short-term interests of one steel plant, as using legislation to seize foreign assets would damage Britain’s credibility.
“Today’s China is not the China of 1840,” she said, referring to the First Opium War, in which Britain defeated Qing China and forced it to pay compensation. “Today’s Chinese enterprises hold multiple cards in law, capital and international morality.”
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