The UK government has taken decisive action to exclude China [1] from its steel industry, following emergency legislation passed on Saturday to secure control of Chinese-owned British Steel. Business Minister Jonathan Reynolds announced the move on Sunday, citing national interests and economic stability.
The decision came after China’s Jingye Group declined a £500 million ($654 million) government aid package aimed at preventing irreversible damage to British Steel’s blast furnaces. Reynolds explained that the furnaces, located in Scunthorpe, require constant fueling and are currently losing £700,000 daily. Their closure would have left the UK as the only major economy unable to produce virgin steel from raw materials like iron ore and coke.
Reynolds criticized previous governments for allowing Chinese companies to enter the steel sector, calling it “naive”. He highlighted Jingye’s ties to the Chinese Communist Party and emphasized that such connections made their proposals unacceptable.
“You’ve got to be clear about what is the sort of sector where we can promote, cooperate; and ones, frankly, where we can’t. I wouldn’t personally bring a Chinese company into our steel sector. I think steel is a very sensitive area,” Reynolds stated, adding that the UK must be clear about sectors where cooperation with China is viable and those where it is not.
Jingye Group acquired British Steel in 2020 after the company faced insolvency. The group’s plans to import steel from China for processing in Britain were met with resistance, especially against the backdrop of global overcapacity in the steel industry and challenges posed by U.S. tariffs.
While the Labour government has sought to improve relations with China since taking office in 2024, Reynolds noted that certain industries, like car manufacturing and life sciences, are less sensitive to Chinese investment. Recent diplomatic efforts included visits by British Finance Minister Rachel Reeves to Beijing in January and Chinese Foreign Minister Wang Yi to London in February, resuming talks after a six-year hiatus.
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[1] China no longer welcome in UK steel sector, minister says https://www.reuters.com/world/uk/china-no-longer-welcome-uk-steel-sector-minister-says-2025-04-13/