British men of steel grappling over China moves
Jingye Group’s plan to shut down crucial steel plant in the UK sparks ‘national security’ row in London
China is trying to decimate the United Kingdom’s industrial base. Emergency measures by the UK government were rolled out at the weekend to save British Steel amid a “national security” row with the Chinese-owned Jingye Group, which has “links” to the ruling Communist Party.
The multinational conglomerate had threatened to close the “critical” steel plant in the English town of Scunthorpe despite offers of a multi-million-pound bailout.
If the Jingye Group had shut down the mill’s blast furnaces, it would have left Britain as the only member of the G7 advanced nations without the capacity to make “virgin steel.”
“We would be mad to allow China access to our critical national industries,” Sir Iain Duncan Smith, a Conservative member of parliament and a former leader of the party, said.
“I argued that we needed to stop them being [in] our nuclear industry in the past … the only reason the Chinese invested in our steel industry was so that, in due course, they could turn off the furnaces so we would have to buy their steel,” he added at the weekend.
Men of steel:
- The British government has “taken control” of the plant after an emergency session of the UK parliament on Saturday.
- Ministers feared the Jingye Group was planning to “sabotage” the site to increase reliance on “cheap Chinese steel imports,” The Times media group reported on Monday.
British steel companies have encountered difficulties.
China’s Embassy in London
Delve deeper: Business Secretary Jonathan Reynolds illustrated the Labour government’s hardline stance. He made it clear that even privately owned companies, such as the Jingye Group, had “direct links to the Chinese Communist Party.”
Between the lines: “I would not personally bring a Chinese company into our steel sector,” he said in a reference to the previous Conservative administration, which gave the green light for the Jingye Group to buy the British Steel plant.
Big picture: High-quality steel is not only vital for the defense industry. It is also crucial for big-ticket sectors involving auto manufacturers, as well as major infrastructure projects, such as housing, rail upgrades and green technology.
Bottom line: “British steel companies have encountered difficulties. It is hoped that the British government will actively seek negotiation with the relevant Chinese company to find a solution acceptable to all parties,” China’s embassy in London said in a statement.
China Factor comment: Heavily subsidized Chinese state-owned and private-sector manufacturers have shattered the global trade system. In turn, this has triggered a tariff war amid a rise in nationalism and protectionism across the planet.