BRITISH STEEL SECTOR SHUTS OUT CHINA – Emergency legislation passed to ensure control of Chinese-owned British Steel
British Business Minister Jonathan Reynolds, said China is no longer welcome in Britain’s steel sector after the government had to pass emergency legislation on Saturday to ensure control of Chinese-owned British Steel.
Reynolds said the refusal of China’s Jingye Group 600768.SS to accept a roughly 500 million pound government aid package last week to stop irrevocable damage to blast furnaces left the government with no alternative to intervening directly.
In an interview, he said that against a backdrop of global overcapacity in much of the steel industry and challenges from U.S. tariffs, Jingye wanted to import steel from China for further processing in Britain.
But the closure of blast furnaces at the British Steel plant in Scunthorpe – which need to be constantly fuelled and are losing 700,000 pounds a day – would have left Britain as the only major economy unable to produce so-called virgin steel from iron ore, coke and other inputs.
Adding that, previous British governments had been “naive” to allow Chinese companies to be involved in the steel sector.
Large industrial companies such as Jingye Group had direct links to the Chinese Communist Party and China’s government would understand why Jingye’s proposal was unacceptable to Britain, he added.
Jingye bought British Steel from the government in 2020 after the company became insolvent.
Since coming to office in 2024, the Labour government has stepped up engagement with China after tensions under previous Conservative governments over human rights, Hong Kong and latterly restrictions on investment over security concerns.
