A Chinese steelmaker’s bid to use British Steel as a base in western markets has turned into a political row, after the UK government introduced a bill that could nationalize the East Anglia-based company.
Jingye Group, a privately owned steel producer based in Hebei Province, earned British Steel for £70 million ($91 million) in 2020, partly in the hope that owning manufacturing capacity inside Britain would help it circumvent 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 £1.2bn in British Steel but has yet to turn back annual losses estimated at £250m, largely due to high UK electricity costs 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 after Washington found that Chinese steelmakers had been buying up foreign steel mills to circumvent US tariffs.
Jingye said in the same month that the Scunthorpe steelworks was losing £700,000 a day and was no longer financially viable. It also rejected a £500 million state bailout. The UK Parliament approved emergency legislation on April 12, allowing the government to take control of British Steel’s blast furnaces, prevent their closure and provide the raw materials needed to keep them running.
At the 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 he would introduce the Steel Industry (Nationalisation) 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 pathway to bring steel companies into public ownership where necessary.
“The revitalization of our steel sector is a key priority for this country and this is an important first step in protecting our steelmaking capability, which will allow us to secure the future of British Steel and explore possible options to modernize the industry,” said Industry Minister Chris McDonald.
McDonald said the bill’s early progress through Parliament showed the government was serious about securing Britain’s domestic steel production.
“The British government must maintain fairness, impartiality and non-discrimination, act carefully in its decisions and protect the legitimate rights and interests of Chinese enterprises.” said a spokesman for China’s Ministry of Commerce.
The spokesman said the British government had been scrutinizing British Steel for more than a year since it took over from Jingye and that any action by Britain must take full account of the significant investment made by the Chinese company in the British steel industry and its contribution to the British economy and society.
The spokesman called on Britain to respect Jingye’s wishes and market principles, seek “a fair and just solution acceptable to both sides”, and said China will take strong measures to protect the rights and legitimate 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 bought by Jingye for manufacturing, but for bonding,” he says. “The acquisition helped China create an export route for parts and engineering services in Europe’s automotive, rail transport and power equipment sectors.”
He says Jingye also transferred part of its digital dispatch platform to British Steel after the acquisition in an attempt to reshape its 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 must rely on technical services, short-term leases and non-controlling cooperation to maintain a presence while reducing political risk.
He says that, in the case of Jingye’s purchase of British Steel, the real damage is not only the loss of capital, but also the loss of reputation of the Chinese firms.
Industrial vandalism
Britain was once the workshop of the world, with coal, iron ore, steam engines and railways helping to drive The Industrial Revolution. From the 19th century onwards, British iron and steel supported railway networks, shipbuilding, bridges and the manufacture 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 increased production turned China into the world’s dominant steel producer, but also created chronic global steel overcapacity.
This added pressure on older British manufacturers already burdened by high labor costs, expensive energy, aging factories and repeated cycles of nationalization and privatisation.
British Steel itself was created by nationalization. It was formed in 1967 when the UK government brought the country’s leading steel companies into public ownership. It became one of the largest steel producers in Europe, supplying railways, construction, car manufacturers and heavy industry. But later it struggled with falling demand, labor disputes, aging factories and foreign competition. After privatization in 1988, the business changed hands several times before collapsing into bankruptcy in 2019 and being rescued by Jingye in 2020.
British Steel remained loss-making under Jingye. it reported a post-tax loss of £227m in 2023, up from £367m in 2022, and said losses continued into 2024. Its claim in March 2025 that Scunthorpe was losing £700,000 a day would equate to around £255.5m over a full year.
In April last year, GMB union general secretary Gary Smith said British workers were legitimately concerned about sabotage and what he called industrial vandalism in the country.
Conservative Party leader Iain Duncan Smith also accused Beijing of meddling in British Steel, while Business Secretary Jonathan Reynolds said Chinese firms should be excluded from “highly sensitive” industries in the UK.
“At a time when the United States is using tariffs against countries including Britain and pursuing unilateral and protectionist trade harassment, some British politicians are attacking the Chinese government and Chinese companies rather than criticizing Washington.” said a spokeswoman for the Chinese embassy in the UK. “What exactly are they trying to achieve?”
The spokesman said British Steel had already suffered years of losses and entered bankruptcy before 2020, while Jingye’s funding had kept the company alive and helped protect jobs.
“Any words or actions that politicize trade issues and engage in malicious noise will damage the confidence of Chinese enterprises to invest in the UK and harm China-UK economic and trade cooperation,” the spokesman said.
£1 billion or £100 million?
In March this year, Jingye was said to be looking for around £1bn in compensation from the UK government, saying it had put £1.2bn into British Steel from 2020, while local media reported that the settlement proposed by London was understood to be under £100m.
The “investment” claim has also been disputed, as public reports reportedly indicated that Jingye and related companies had provided British Steel with £735.7m in loans from 2023 and charged tens of millions of pounds in interest, although a Jingye spokesman said the £1.2bn was a mix of equity and low or zero interest loans used to support operations.
A columnist based in Henan said Britain should not risk stable China-UK trade ties for the short-term interests of a steel plant, as the use of foreign asset seizure legislation would damage Britain’s credibility.
“The China of today 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 reparations. “Today’s Chinese enterprises have multiple cards in international law, capital and morality.”
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