China issues warning over government's plan to nationalise British Steel

China has urged Britain to "make decisions prudently" over ‌plans to nationalise British Steel and warned that it would protect Chinese businesses.

The British government seized operational control of ⁠British Steel from its ⁠Chinese owners, Jingye, in April ‌2025.

Plans announced by Prime Minister Keir Starmer on Monday, could see the UK fully nationalise the company.

On Thursday, the Chinese commerce ministry called on the British government to "respect the wishes of firms ‌and market principles and avoid the abuse of administrative coercive measures".

China will closely follow the developments and will "take strong ⁠measures to safeguard legitimate rights of Chinese companies", according to a statement by ⁠the ministry.

Starmer says nationalisation will make Britain 'stronger'

On Monday, the prime minister said the necessary legislation required to nationalise British Steel will be introduced this week. The decision follows Labour's huge losses in the May elections.

The move would come after emergency legislation was brought in last year to stop one of Britain's last major steelmaking plants, in Scunthorpe, from collapsing by bringing it under effective government control, saving thousands of jobs.

But while the state was controlling the company, rather than its Chinese owner, Jingye, it is not currently state-owned.

Now Sir Keir said a public interest test to justify full nationalisation "could be met".

"I can announce that legislation will be brought forward this week to give the government powers, subject to that public interest test, to take full national ownership of British Steel," the prime minister said.

The test will consider factors including national security, maintaining critical national infrastructure and supporting the economy.

If nationalisation efforts are successful, it will be the first time British Steel has been under government control since 1988.

The announcement was welcomed by unions and trade bodies alike.

Why did the government seize control of the plant?

British Steel has been owned by the Chinese firm Jingye Group since 2020.

The Scunthorpe site employs 3,500 people and produces virgin steel, a product made from raw materials - as opposed to recycled materials - using two huge blast furnaces.

Jingye stepped in with a deal to buy British Steel's Scunthorpe plant out of insolvency five years ago, but the company continued to struggle in an already over-supplied global market.

Jingye said the blast furnaces were "no longer financially sustainable", blaming "highly challenging" market conditions, tariffs and costs associated with transitioning to lower-carbon production techniques.

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Remarkable step by the government

Sir Keir Starmer's government came under pressure to intervene with British Steel after Jingye decided to cancel future orders for the iron ore, coal and other raw materials needed to keep the furnaces running at the beginning of April.

If the furnaces had shut, the UK would've become the only country in the G7 - the forum of the world's most powerful economies - without the capacity to make steel from scratch.

The Government's move to protect the site cost it £377m between April 2025 and January 2026, a report by the National Audit Office (NAO) found.

(c) Sky News 2026: China issues warning over government's plan to nationalise British Steel