Chinese firms may be blocked from critical UK sites in future after 'sabotage' warnings (2025)

Beijing has been accused of deliberately trying to undermine the UK’s critical industry and energy infrastructure over the threat to halt steel production in Scunthorpe.

Business Secretary Jonathan Reynolds said that Chinese firms should be excluded from “very sensitive” industries in the UK after the government was forced to take emergency control of British Steel on Saturday.

The minister said he was not alleging the Beijing regime was deliberately interfering to “sabotage” steelmaking at the Scunthorpe site, but warned that there was now a “high trust bar” for the British government dealing with Chinese companies.

But critics of China, including former Tory leader Sir Iain Duncan Smith, and the GMB union, went further and suspected Beijing of interference in British Steel.

MPs were recalled to parliament on Saturday to pass emergency legislation allowing the government to take control of operations at British Steel from Jingye after the Chinese firm threatened to turn off the blast furnaces at the Scunthorpe site.

It emerged on Sunday that despite the seizure of control of the company, the government is still in a race against time to save the last two remaining blast furnaces in the UK because a crucial shipment of iron ore pellets has not been paid for and remains in port.

And on Saturday police had to be called to the plant when workers refused to allow executives into key areas of the site, fearing they would try to shut it down.

It raised questions over whether the Chinese state asked owners Jingye to switch off the furnaces.

Former Tory leader Iain Duncan Smith told The i Paper: “I don’t know for sure, but given the Chinese government’s close links with the company, I wouldn’t be surprised if they did.”

GMB Union general secretary Gary Smith said workers had acted because they were “legitimately” worried about sabotage.

“We were worried about industrial vandalism and there was a worry about sabotage on the site, quite frankly,” he said.

And Luke de Pulford, executive director of the Inter-Parliamentary Alliance on China, said: “It has been an explicit strategy of the Chinese Communist Party to undermine the industrial base of democratic countries for years, and interference in critical national infrastructure is a well documented part of this strategy.

“This is not surprising. What is worrying is that those of us who warned this would happen were ridiculed, and despite Jingye’s appalling behaviour over British Steel, we are still seeking to increase Chinese investment into the UK.

“Beijing is a malevolent actor and no good can come of allowing authoritarian Xi access to UK energy. The Government needs to wake up and tell the country how they intend to rip the Chinese Communist Party out of UK industry.”

Asked by BBC’s Laura Kuenssberg on Sunday whether he suspected sabotage was at play, Reynolds said: “I don’t want to make what is already a fairly dramatic situation more than it is. I think there were concerns, quite reasonable concerns, about the gap between the government indicating it was going to step in and take control and being in the control that I am of now on the site today.

“And the risk is, having made the decision, something happens, it might not be sabotage, it might be neglect.

“The conscious decision not just to not order raw materials but to sell existing supplies of raw materials is the significant change that required the government to step in.”

Reynolds refused to rule out blocking Chinese involvement in sectors such as nuclear. While he did not elaborate on which “sensitive industries” China should be excluded from, the state-owned China Investment Company (CIC), which has global assets worth some £1.1trn, has a stake in Heathrow airportand UK gas networks, holds an 8.7 per cent share of Thames Water.

In February The Financial Times reported the security services were taking part in a review of China’s role in the UK’s energy infrastructure.

A No10 source however later tried to dampen down any potential row with China. A source said: “There are tests for critical national infrastructure that look at foreign ownership and other things and they remain in place.”

And in an interview with Sky News’s Sunday Morning with Trevor Phillips, the Business Secretary then did not rule out Chinese involvement in nuclear energy projects like Sizewell C , but said areas like agriculture, life sciences and motoring manufacturing were “non-contentious” and the UK would continue to trade with firms from that country.

Asked if he believed the Chinese government was behind Jingye’s actions, Reynolds said: “Look, with any major Chinese industrial company there are always direct links to the Chinese Communist Party.

“I mean, you couldn’t run – you wouldn’t be allowed to run a company in China without that kind of link. I’m not accusing the Chinese state of being directly behind this… I’m not alleging some sort of foreign influence.”

He added that Jingye was “not [acting] in the kind of rational way we’d expect a company to operate in a market economy”.

“A lot of UK-Chinese trade is in non contentious areas. You know agricultural products, life sciences or automotive, it’s not difficult…

“I think you’ve got to be clear about what is the sort of sector where actually we can, you know, promote and 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.”

Asked whether there was a “high trust bar” for dealing with firms from the country, he said: “Yes, we have got to recognise that.”

UK security sources said the prospect of Chinese government involvement is a concern and something that would be under investigation.

Former MI6 officer Matthew Dunn when I asked about a possible investigation said: “Without doubt. A walloping punch by China at a tier-1 industrial nation. Hard to see how it wasn’t CCP driven. Begs question why intel didn’t see it coming or if it did why politicians did nothing until Chinese bailed.”

Reform leader Nigel Farage told Laura Kuenssberg: “This is a big strategic decision by the CCP (Chinese Communist Party).”

Asked for his evidence to support that claim, he said: “You can call it intuition if you like.

“I am 100 per cent certain they bought British Steel to close British Steel.”

Reports on Sunday night suggested that parts of China’s security apparatus could be targeted under the government’s new foreign influence rules

The government has yet to say if China will be on the enhanced tier of the foreign influence registration scheme – which would mean the activities of individuals and companies operating in the UK would have to be monitored. But the Guardian reported some elements of the Chinese state could be.

Shadow business secretary Andrew Griffith said the episode should heighten concerns over how China operates, telling the BBC: “It is certainly a mistake for the Government, particularly in its energy policy, to be going headlong into more dependency on the Chinese.”

Race to save British steel as shipment of crucial iron ore pellets sits in nearby dock unpaid for

An urgent shipment of iron ore needed to keep Scunthorpe’s blast furnaces running is being held up in dock due to the crisis engulfing British Steel, insiders have revealed.

The cargo of iron ore pellets – a key ingredient to make virgin steel – cannot be unloaded at the docks in Immingham in the Humber Estuary because it has only been partly paid for by Jingye, the Chinese company which owns the works.

The hold-up underlines therace against time facing ministers and unions to keep the British steel industry aliveand sheds further light on why the government was forced to recall parliament on Saturday to pass emergency legislation to take control of the operation of the Scunthorpe plant.

Industry sources said there were just “days” left for the pellets – and a separate shipment of coking coal currently en route by sea to Immingham docks – to reach the steelworks to keep the furnaces running.

The plant is just 20 miles inland from Immingham but the iron ore pellets are stuck in dock until they can be paid for in full.

It is hoped that the government’s seizure of control of the operations – a stop short of full nationalisation – will mean state funds can start to flow as soon as possible to pay for the essential raw materials.

The coking coal is currently on a cargo ship on its way from Japan to the Humber Estuary.

But there are fears inside government that Jingye, which placed the order, might turn the ship around and sell on the materials elsewhere.

The Chinese firm isalready suspected of trying to sabotage steel production at Scunthorpeby selling off raw materials and failing to order fresh supplies.

It is understood that the Royal Navy is monitoring the ship from its central maritime command in the UK but there are no plans to escort the vessel unless there is a specific request to do so.

A senior government source said: “We always keep these things under consideration but at the moment ships are passing through and we are monitoring the situation.”

UK defence sources said the ship carrying the coke freight was not currently in UK waters and its arrival was not imminent.
But it is possible that, once it nears Britain, the situation could change and an escort could be needed.

A Ministry of Defence spokesperson said: “While the Royal Navy routinely monitors ships due to arrive in UK waters, we are not involved in escorting this ship.”

Martin Vickers, Conservative MP for Brigg and Immingham, warned the Commons last week that he had been told at the Scunthorpe plant that unless an order of iron ore pellets was made imminently it would be “too late” to save the factory.

He told MPs: “It is very obvious that Jingye has cancelled the raw material orders that are essential to keep the furnaces going; those orders were due in mid-May.

“When I was at the steelworks on Friday, I was told that unless another order for iron ore pellets could be placed this week, it would be too late.”

Jane Merrick