The United Kingdom's decision to nationalise British Steel has led to a diplomatic dispute with China. The UK government took operational control of British Steel last year after Jingye Group, the Chinese owner, considered closing the blast furnaces at its Scunthorpe plant in northern England—the last in the UK producing "virgin steel" from raw materials.

The Department for Business and Trade announced the nationalisation on Thursday, stating the move would save thousands of jobs and protect the UK’s national interest by ensuring a domestic supply of steel for major construction projects and the defence industry. Business Secretary Peter Kyle said, "British Steel now belongs to the British people and our focus is on the future: stabilising the business, backing the communities that rely on it and building a sustainable, competitive and decarbonised steel sector for the years ahead."

In response, Jingye Steel demanded that the UK immediately stop "trampling on international investment rules" and provide prompt, full, and effective compensation for all investment losses incurred due to the nationalisation.

China’s Ministry of Commerce criticized the UK for disregarding Jingye’s contributions to the British economy and accused it of forcibly taking over and nationalising British Steel under the guise of national security. The ministry stated this action "seriously damages" Jingye’s legitimate rights and interests and "seriously undermines" Chinese investor confidence in the UK.

This dispute unfolds amid political leadership changes in London and ongoing challenges faced by UK Prime Minister Starmer.

Sources