Daily huge losses have led Chinese enterprises to hope to shut down steel furnaces rather than close the British Steel Company.

The Chinese-controlled British Steel Company was taken over by the British government through emergency legislation over the past weekend. Previously, the Chinese-controlled enterprise hoped to close the last steel blast furnace in the UK and import steel from China for processing in the UK. If the blast furnace is closed, this老牌 steel power would lose the ability to produce steel from iron ore.

On April 13, British Secretary of Commerce and Trade Reynolds said that the previous day, the British government had to pass emergency legislation to ensure control over the British Steel Company held by Chinese capital. He also said that allowing Chinese capital enterprises to enter the UK steel industry in the past was "naive." This means that Chinese capital is no longer welcome in the UK steel industry.

After the British Steel Company declared bankruptcy in northern England, a company from China acquired it from the British government. This company is the only one left in the UK with the capability to produce steel from iron ore.

Not long ago, Chinese enterprises decided to cancel an order for iron ore, which was originally intended for the blast furnace of the British Steel Company. Without iron ore or raw materials like coke, the blast furnace is very likely to be permanently shut down - once cooled, restarting the blast furnace is extremely difficult and costly.

The UK was once the number one steel producer more than a hundred years ago. If the blast furnaces of the British Steel Company are closed, the UK will only have electric arc furnaces that use scrap steel as raw materials, losing the ability to produce steel from iron ore. Other countries in the G7 still retain the ability to produce steel from scratch.

In an interview with the BBC, British Secretary of Commerce and Trade Reynolds said that if no action is taken, "the blast furnaces will be gone, and UK steel production, including primary steel production, will disappear." "So we gave ourselves a chance, we took control of the factory."

The day before, the Prime Minister convened MPs to the House of Commons to urgently pass a bill to prevent Chinese enterprises from closing two blast furnaces, and granted the Secretary of Commerce and Trade the power to guide the board of directors and employees of the British Steel Company to ensure that 3,000 employees can receive wages and the blast furnaces can obtain the raw materials needed to maintain operations.

In an interview on Sky News on April 13, Reynolds refused to blame "Chinese enterprises deliberately disrupting operations," but admitted that there is currently a "high trust threshold" regarding Chinese investment in the UK. He disclosed that Chinese enterprises hope to import steel directly from China and then process it further in the UK. The British Secretary of Commerce and Trade emphasized that steel is a very sensitive field, and "personally, I would not allow Chinese capital to enter our steel industry."

However, Reynolds also stated that other fields such as automobile manufacturing, life sciences, and agricultural products are less sensitive to Chinese investment.

Since the Labour Party cabinet took office last year, Sino-British relations have improved significantly, and the stalled trade dialogue between the two countries, which had been suspended for more than six years, was restarted earlier this year.

Source: Associated Press, Reuters

Original article: https://www.toutiao.com/article/1829404236257290/

Disclaimer: The article solely represents the author's views.