By Reuters

Published on 18 Jul 2026.

The nationalisation of British Steel on national security grounds has drawn a sharp response from Beijing, reflecting the strategic importance of the steel industry.

China's Ministry of Foreign Affairs has stated it will closely monitor the United Kingdom's nationalisation of British Steel, a company previously owned by a Chinese steelmaker.

The UK government nationalised British Steel on Thursday, fully taking over the loss-making company, then under the ownership of Jingye, on national security grounds.

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“The issue has drawn widespread attention in China,” the Chinese Foreign Ministry said in a statement on Saturday.

“How Britain handles the matter will directly affect Chinese investors’ confidence in the UK’s investment climate and shape public perceptions in China of the British government’s credibility,” it said.

The Chinese ministry also urged Britain to seek a mutually acceptable solution, including arrangements for compensation.

Jingye Steel said last week it wants Britain to compensate it for losses incurred through its investment in British Steel.

British Steel is the sole source of primary steelmaking in the UK, supporting around 2,700 jobs at its main steelworks in Scunthorpe and thousands more through its supply chain.

Jingye – which is among the 100 biggest companies in China – bought British Steel for 70 million pounds ($94m) in 2020. By 2025, Jingye said it was losing 700,000 pounds ($942,000) every day.

British Steel’s nationalisation has been in the works for more than a year. In March 2025, Jingye carried out a consultation that concluded that the British Steel furnaces were not financially sustainable.

The following month, it emerged that Jingye had cancelled orders for a key material used in the steelmaking process, stoking fears that it was planning to shut down the blast furnaces.

Closing the Scunthorpe plant would make Britain the only G7 country without the ability to produce virgin steel.

In April, the UK government took operational control of British Steel from Jingye to stop that from happening, although the Chinese company retained ownership.

The UK government said on Thursday that nationalising British Steel was vital to securing jobs and supply chains, safeguarding major infrastructure projects and national security.

British Steel's nationalisation underscores the UK's willingness to intervene in critical industries to protect national security and economic stability. The compensation dispute with Jingye could influence future Chinese investment in the UK. The outcome will be closely watched by other foreign investors.