China's Ministry of Foreign Affairs has stated it will closely monitor the United Kingdom's nationalization of British Steel, previously owned by Chinese steelmaker Jingye.

The UK government nationalized British Steel on Thursday, fully taking over the loss-making company on national security grounds.

"The issue has drawn widespread attention in China," the Chinese Foreign Ministry said in a statement on Saturday. "How Britain handles the matter will directly affect Chinese investors' confidence in the UK's investment climate and shape public perceptions in China of the British government's credibility."

The Chinese ministry also urged Britain to seek a mutually acceptable solution, including arrangements for compensation.

Jingye Steel said last week it wants Britain to compensate it for losses incurred through its investment in British Steel.

British Steel is the only source of primary steelmaking in the UK, supporting approximately 2,700 jobs at its main steelworks in Scunthorpe and thousands more across the supply chain.

Jingye, among China's top 100 companies, bought British Steel for £70 million ($94 million) in 2020. By 2025, Jingye claimed it was losing £700,000 ($942,000) daily.

The nationalization had been in preparation for over a year. In March 2025, Jingye conducted a consultation concluding that British Steel's furnaces were not financially sustainable.

The following month, Jingye reportedly canceled orders for a key steelmaking material, fueling fears of planned blast furnace closures.

Closing the Scunthorpe plant would have made the UK the only G7 country unable to produce virgin steel.

In April, the UK government took operational control from Jingye to prevent such a shutdown, though the Chinese firm retained ownership.

The UK government stated on Thursday that nationalizing British Steel was vital to securing jobs, supply chains, major infrastructure projects, and national security.

Source: www.aljazeera.com