UK tightens grip on steel industry, rejects Chinese ties
Jonathan Reynolds, the UK Minister of Trade, stated that China's involvement in the British steel industry is unwelcome. In an interview with Sky News, he discussed the circumstances that prompted the UK government to take control of British Steel.
Reynolds explained that the British government's efforts to regain control over British Steel are a consequence of the actions of the company's owner, the Chinese group Jingye.
He noted that Keir Starmer's cabinet proposed offering the Chinese side government assistance equivalent to over $697 million in exchange for reversing the decision to shut down two blast furnaces at the Scunthorpe plant in northern England. This plant is the last in the UK where steel is smelted from iron ore.
According to the British minister, Jingye's management did not accept this proposal. The Chinese group argued that the need to shut down the furnaces was due to the unprofitability of their continued operation, citing high costs associated with environmental regulations and tariffs.
In an interview with Sky News, Reynolds criticized previous UK governments for showing "naivety" by allowing Chinese companies to engage in the steel sector. He emphasized that large enterprises like the Jingye Group have direct ties to the Chinese Communist Party.
"I think steel is a very sensitive area. I don't know... the Boris Johnson government when they did this, what exactly the situation was. But I think it's a sensitive area," the trade minister emphasised.
The minister identified "sensitive sectors of the economy"
Reynolds also stated that he views other sectors, such as automotive or agricultural products, as less sensitive to Chinese investments.
The British government sold British Steel to Jingye in 2020 after the British company became insolvent. On Saturday, an extraordinary session of both houses of parliament supported the Starmer cabinet's proposal for the state to take control of British Steel. The British government does not rule out the nationalization of this company to protect the Scunthorpe plant from closure.
