China Warns of Retaliatory Measures After UK Nationalises British Steel

China warned it may take action to safeguard the interests of its companies following the United Kingdom's decision to nationalise British Steel, escalating tensions over the future of Chinese investment in one of Britain's strategic industries.

In a statement released on Saturday, China's Ministry of Foreign Affairs said it is closely monitoring the UK's takeover of British Steel, formerly owned by Chinese steelmaker Jingye Group, and would adopt "appropriate measures" to protect the legitimate rights and interests of Chinese businesses if necessary.

The ministry said the case has attracted widespread attention in China, adding that the British government's handling of the nationalisation would have a direct impact on Chinese investors' confidence in the UK's business environment and influence broader perceptions of Britain's policy credibility.

Chinese officials called on London to seek a mutually acceptable resolution, including compensation arrangements for the former owner.

The comments follow last week's announcement by Jingye Group that it intends to seek compensation from the British government for losses stemming from its investment in British Steel.

The dispute is expected to become another point of friction in UK-China economic relations, particularly as both governments balance national security concerns with the need to attract foreign investment.

The UK government announced on July 16 that it had taken full ownership of British Steel after years of financial losses, arguing that nationalisation was necessary to safeguard the country's steelmaking industry and preserve domestic production capacity.

Officials said the move forms part of a broader strategy to strengthen Britain's industrial base, including tariffs and import quotas aimed at protecting domestic producers from low-cost steel imports, as well as a recently concluded tariff agreement with the United States.

Outgoing Prime Minister Keir Starmer said the decision was made in the national interest, stressing that public ownership would secure the long-term future of Britain's steel industry while protecting jobs and critical industrial capabilities.

The latest dispute underscores growing geopolitical tensions surrounding foreign ownership of strategic assets, with governments increasingly prioritising industrial security while investors seek greater certainty over cross-border investments.