Reynolds said the refusal of China's Jingye Group to accept a roughly 500 million pound ($654 million) government aid package last week to stop irrevocable damage to blast furnaces left the government with no alternative to intervening directly.
Against a backdrop of global overcapacity in much of the steel industry and challenges from U.S. tariffs, Jingye wanted to import steel from China for further processing in Britain, Reynolds said in an interview with Sky News.
Previous British governments had been “naive” to allow Chinese companies to be involved in the steel sector, Reynolds said.
“You’ve got to be clear about what is the sort of sector where we can promote, cooperate; and ones, frankly, where we can’t. I wouldn’t personally bring a Chinese company into our steel sector. I think steel is a very sensitive area,“ he said.
Since coming to office in 2024, the Labour government has stepped up engagement with China after tensions under previous Conservative governments over human rights, Hong Kong and latterly restrictions on investment over security concerns.
British finance minister Rachel Reeves visited Beijing in January and Chinese foreign minister Wang Yi visited London in February to revive talks that were paused for over six years.
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