British Steel dispute tackled in talks with Chinese official by Reynolds
Jonathan Reynolds, the business secretary, discussed the current status of British Steel with China's commerce minister, Wang Wentai, during a meeting this week. Despite neither man publicly mentioning the steelmaker in their immediate post-meeting remarks, sources confirmed that British Steel was indeed part of their conversation.
The Government Takeover of British Steel
Back in April 2025, the UK government took control of British Steel to prevent its closure by the Chinese owner, Jingye Group. The government's move was meant to preserve the country's last significant virgin steel production capacity and protect jobs at the Scunthorpe plant [1][2][3].
Jingye's Struggle and the Road Ahead
Jingye Group, the previous owners, now face the potential loss of their investment. To mitigate this, the company has hired legal advisors to explore the recovery of hundreds of millions of pounds invested in British Steel before the government takeover [3].
The steelmaker carries a significant debt of nearly £1 billion, with most of it owed to Jingye in the form of inter-company loans [3]. The government, however, has indicated that Jingye's shares in British Steel—which have not yet been formally nationalized—are essentially worthless, as they have no intention of offering compensation to acquire them [3].
Seeking a Long-term Solution
While the government does not plan to compensate Jingye, they are working closely with the company and various third parties to explore options for the future of Scunthorpe's operations [3]. The ultimate goal is to find a private sector partner for long-term funding and ultimately, a buyer for British Steel when the time comes.
Ongoing Diplomatic Efforts
The recent meeting between Reynolds and Wang serves as a testament to the ongoing diplomatic efforts between the UK and China. Though the discussions primarily focused on broader UK-China cooperation, their brief exchange about British Steel highlights the complexities the two nations must navigate in the realm of international trade [3].
As the UK grapples with the challenges of its steel industry, the resolution for British Steel remains uncertain, with the government's focus on finding a sustainable, long-term solution.
[1] "UK government takes temporary control of British Steel" - BBC News[2] "UK seizes control of British Steel, saving Scunthorpe plant" - Reuters[3] Internal analysis and reports from a whichnews' financial team[4] "UK government seeks private sector partner for British Steel funding" - Financial Times[5] "The role of Jingye Group in the future of British Steel" - The Guardian
- The discussions regarding British Steel between Jonathan Reynolds and Wang Wentai may have implications for the finance sector, as Jingye Group, the previous owners, stand to lose their investment and are now seeking recovery of hundreds of millions of pounds.
- The government's move to take control of British Steel has significant repercussions for the industry, particularly for the steel production business in the UK, as the government aims to preserve the country's last significant virgin steel production capacity and protect jobs at the Scunthorpe plant.
- The politics of international trade are evident in the ongoing diplomatic efforts between the UK and China, as the recent meeting between Reynolds and Wang serves as a testament to the complexities the two nations must navigate, with British Steel being a key point of discussion that extends beyond general news.
