China condemns UK steel nationalisation as investment confidence erodes

China’s Ministry of Commerce has formally rebuked the United Kingdom over the nationalisation of British Steel, stating that the expropriation has severely undermined Chinese companies’ confidence in investing in the UK. The diplomatic friction follows the official transfer of ownership from the Chinese firm Jingye to the UK government on Thursday, a move Beijing characterises as a disregard for legitimate commercial rights.

The nationalisation process, which has been underway for more than a year, culminates in the state taking full control of the UK’s only primary steelmaking facility. The government stated the intervention was necessary to protect national interests and secure approximately 2,700 jobs at the Scunthorpe steelworks, while also supporting roles across the wider supply chain.

Tensions escalated in March 2025 when the UK government seized operational control from Jingye after the Chinese owner cancelled orders for a key material, stoking fears of a shutdown. At the time, Jingye had conducted a consultation concluding that the furnaces were not financially sustainable, citing daily losses of 700,000 pounds. The firm had purchased British Steel for 70 million pounds in 2020.

In a statement released on Friday, the Ministry of Commerce asserted that the expropriation seriously damaged Jingye’s legitimate rights and interests. The ministry urged the UK to fulfil its obligations under the China-UK Investment Protection Agreement and confirmed it would assist Chinese companies in protecting their rights following the forcible takeover.

An independent valuer appointed by the UK government will now assess whether any compensation is payable to Jingye. The long-term impact on Sino-UK investment flows remains uncertain as diplomatic relations adjust to the state’s retention of the strategic asset.