In 1875, Britain, at the height of its Industrial RevolutionA period of sudden, rapid industrialisation that transforms a country from an agricultural to an industrial economy., produced almost 40% of the world's steel.¹

Those glory days are long gone. Today, the British government is scrambling to save the very last fragment of its steel industry, which is owned, not by a British company, but a Chinese one.

The Jingye GroupA Chinese conglomerate (a very large company made up of lots of other smaller companies) with businesses in steel, chemicals, international trade, tourism and hotels. bought British SteelA steel business founded in 2016 with assets acquired from other businesses. in 2019 when it was on the brink of collapse. Now it stands accused of letting its most important site, in ScunthorpeAn industrial town in Lincolnshire, England, with a population of 81,000. , shut down.

The Chinese steel giant was only the most recent of a number of Chinese companies eager to spend money in Britain. Three proposed nuclear power stations have received millions in Chinese funding. Many British utilitiesKey services that are used by the public, such as electricity or water supply. companies are also part-owned by Chinese firms.

Just 15 years ago, in fact, the UK government was positively encouraging Chinese companies to invest in Britain.

This was called the "Golden Era" in British-Chinese relations.² However, in 2022, new PM Rishi SunakA British politician who was the Prime Minister of the United Kingdom from 2022 to 2024. announced that this era was over.

By this time, the government was already seeking to "decouple" the British economy from the Asian behemothOriginally a monster described in the Bible, today the term is used to describe anything large, unwieldy and potentially dangerous., especially in key strategic industries.

The reason? China has come to be seen as more and more of a danger, especially after a slew of cyberattacks and spying scandals revealed its efforts to sabotageDeliberately ruin, destroy or obstruct something - especially to further your own ambitions. European governments.

It seemed an obvious step to prevent China from accessing important infrastructureThe basic systems and services that a country needs to keep it going., like nuclear power or telecommunicationsThe transmission of information over large distances using electronic means. .

However, the new LabourBritain's main left-of-centre political party. government is trying to carry out a balancing act: thawing relations with China without risking its security or its ties to the USA, China's great rival.

The reasoning is clear. As Chinese spokesperson Victor Gao pointed out recently, Britain does not compete with China in any major sectors.³ At a time of sluggish growth, it has little to lose and much to gain from letting Chinese investmentWhen you put money into a project or idea in the hope it will be successful in the future. flood the economy.

And since Donald Trump upended the global economy with his tariffsA form of tax on imports. , China increasingly looks like a more reliable trading partner than the US.

However, many still worry that China is not just looking to trade with Europe, but to control it. And becoming addicted to Chinese money could give them the leverage they need.

Is Chinese money a threat?

Yes: China is a hostile nation that wants to strengthen its hand in the event of a future conflict with Europe. It is madness to be selling off bits of Britain's economy to a country that openly spies on us.

No: There is no particular reason why Europe and China should be hostile: they could simply have a mutually beneficial trading relationship, if they put political questions to one side.

Or... The Golden Era is over: it is too risky to give China a share in vital infrastructure. But Sino-European trading partnerships could be deepened in less sensitive areas.

Industrial Revolution - A period of sudden, rapid industrialisation that transforms a country from an agricultural to an industrial economy.

Jingye Group - A Chinese conglomerate (a very large company made up of lots of other smaller companies) with businesses in steel, chemicals, international trade, tourism and hotels.

British Steel - A steel business founded in 2016 with assets acquired from other businesses.

Scunthorpe - An industrial town in Lincolnshire, England, with a population of 81,000.

Utilities - Key services that are used by the public, such as electricity or water supply.

Rishi Sunak - A British politician who was the Prime Minister of the United Kingdom from 2022 to 2024.

Behemoth - Originally a monster described in the Bible, today the term is used to describe anything large, unwieldy and potentially dangerous.

Sabotage - Deliberately ruin, destroy or obstruct something - especially to further your own ambitions.

Infrastructure - The basic systems and services that a country needs to keep it going.

Telecommunications - The transmission of information over large distances using electronic means.

Labour - Britain's main left-of-centre political party.

Investment - When you put money into a project or idea in the hope it will be successful in the future.

Tariffs - A form of tax on imports.