In an impassioned address in parliament last week, UK Business Secretary Jonathan Reynolds did not shy away from expressing his concerns regarding Chinese company Jingye’s dealings. He stressed that their actions have not reflected “good faith.” “Despite our substantial offer to Jingye, their demands escalated to what I can only characterize as excessive,” he asserted in the House of Commons.
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Back in 2020, Jingye acquired British Steel out of insolvency with a promise of ushering in a “new chapter” for steel production in the UK. Unfortunately, that optimistic vision has yet to come to fruition.
The situation became critical when Jingye decided to halt the procurement of raw materials essential for operating the two blast furnaces in Scunthorpe, which are colloquially known as Queen Anne and Queen Bess.
If the furnaces had gone cold, there would have been no way to restart them; the molten metal would solidify, rendering them inoperable, and reheating them could lead to catastrophic cracks.
The UK government offered to assist in funding the procurement of these necessary materials, but a consensus with Jingye could not be reached.
As Parliament was preparing for its Easter recess, MPs were urgently recalled last Saturday to pass emergency legislation granting the government control over British Steel. This marked the first Saturday session of Parliament since 1982, during the Falklands War.
Within a day, the law was enacted, enabling the government to implement strategies to secure the vital materials needed to keep the fires of Queen Anne and Queen Bess burning and avert an irreversible situation.
The Response from China
The government noted that it had extended multiple offers to Jingye aimed at keeping the furnaces operational; however, Mr. Reynolds argued that the company appeared intent on closure. Speculation is rife that this could be part of a broader strategy by China to dismantle primary steelmaking in the UK, thereby increasing dependence on Chinese imports.
In subsequent media interactions, Mr. Reynolds ruled out further collaboration with Chinese firms in the steel sector, emphasizing that trust had become an issue.
The Chinese response was both pointed and assertive. “The anti-China rhetoric from certain British politicians borders on the absurd, exposing arrogance and ignorance,” stated the Chinese embassy. They raised a critical question: “As the US imposes tariffs on various nations, including the UK, why do some British politicians persist in attacking China instead of critiquing the US?”
Navigating Future Relations with China
This situation presents a significant dilemma for the UK government. Since assuming office, Prime Minister Keir Starmer’s administration has undertaken a global charm offensive, with particular attention to rebuilding relations with China. Key figures such as Chancellor of the Exchequer Rachel Reeves, Foreign Secretary David Lammy, and Energy Secretary Ed Miliband have made visits to the nation, and Mr. Reynolds is also scheduled to travel there later this year for trade discussions.
With ambitions in sectors like AI, renewable energy, and foreign investment to spur economic growth, China plays a vital role. Concurrently, lingering doubts remain about the reliability of major Chinese corporations.
The Labour party’s manifesto outlined plans to conduct an “audit” of the “opportunities and challenges” posed by China, set to be released later this year. Historically, however, the UK has adopted a more stringent posture towards China, as highlighted this week when the Defence Ministry prohibited electric vehicles with Chinese components from military sites due to security concerns.
Recent tensions between the two nations surfaced when a Labour MP was prevented from entering Hong Kong following her critical stance against the Chinese government, prompting Mr. Lammy to voice his disapproval. Last year, a Chinese businessman connected to Prince Andrew was denied entry to the UK on national security grounds.
When asked about future investments in the steel plant from Chinese enterprises, Mr. Reynolds expressed his reluctance. Yet, he later softened his stance, explaining, “Our differing views were with a specific company” while maintaining that steel remains a “sensitive sector.”
Plans for Scunthorpe
With over 2,700 individuals employed at the Scunthorpe plant—along with thousands of additional jobs reliant on its operations—the stakes are high. During a recent visit, Ms. Reeves reassured the workforce, asserting that the future for Scunthorpe is “bright.” However, when it comes to ownership, she stated, “Nothing is off the table,” indicating that the government may consider nationalizing the facility.
Regardless of the outcome, Ms. Reeves is “determined to do whatever is necessary to protect British industry.” While this development offers a glimmer of hope for the Scunthorpe community, it also raises critical questions regarding the future trajectory of the UK’s relationship with China.
Edited By Ali Musa
Axadle Times International – Monitoring
