U.K.MovestoFullyNationalizeChinese-OwnedBritishSteel

The U.K. government introduced a bill to parliament on Thursday that would allow it to nationalize British Steel Ltd., prompting China’s commerce ministry to urge London to protect the legitimate rights of the company’s Chinese owner.

The Steel Industry (Nationalisation) Bill grants the government the power to take British Steel and other steelmakers into public ownership if deemed necessary and in the public interest.

The government said the legislation aims to safeguard the domestic industry and ensure sovereignty over steel production. It builds on a national steel strategy introduced in March, which targets meeting up to 50% of the country’s steel demand domestically to strengthen economic resilience.

The legislative move opens a path to conclude the state takeover after Britain took de facto control of its last virgin steel producer from Hebei Jingye Group Co. Ltd. last year. It also highlights growing friction between London and Beijing over state intervention and the protection of Chinese overseas investments.

Responding to the bill’s introduction, China’s Ministry of Commerce said the U.K. government should acknowledge the massive investments made by the Chinese owner. The ministry urged London to avoid abusing administrative powers and work with Jingye to find a fair and mutually acceptable solution.

Beijing will closely monitor the situation and take strong measures to protect the legal rights of Chinese companies, the ministry said.

Jingye acquired British Steel in March 2020 for about 53 million pounds (nearly $70 million), gaining control of a company with an annual crude steel production capacity of 4.5 million tons. Over the next five years, the Chinese firm invested more than 1.2 billion pounds, despite daily losses of roughly 700,000 pounds.

The conflict erupted on March 27, 2025, when British Steel announced consultations on closing its two blast furnaces — the last two operating in the U.K. To prevent the shutdowns, the government rushed the Steel Industry (Special Measures) Act through parliament in a single day in April 2025, authorizing a state takeover.

Chen Sheng, a researcher at the center for foreign legal studies at Northwest University of Political Science and Law, told Caixin at the time that while Jingye retained nominal ownership, its control had been effectively nullified — it was excluded from decision-making processes, barred from freely utilizing assets, unable to obtain investment returns, and lacked access to a detailed compensation mechanism.

Since assuming control, the U.K. government said it had sought a commercially viable sale agreement with Jingye, but negotiations failed. Keeping British Steel operating has meanwhile become a costly burden, with the government allocating 419 million pounds by the end of March to sustain operations.

British Steel has reported losses every year since 2021. A House of Commons Library report in April cited falling steel prices, high energy costs, unstable blast furnace operations, and a harsh trade environment as key factors. In 2023, British Steel posted an operating loss of 205 million pounds. By the end of that year, the company held 788 million pounds in total assets against 1.04 billion pounds in liabilities.

Contact editor Wang Xintong (xintongwang@caixin.com)