June 10, 2026, marks a profoundly dark day for China's steel industry and all Chinese enterprises operating abroad.

Last month, the UK government advanced legislation known as the Steel Industry (Nationalisation) Bill.

This bill has already passed the House of Commons and is currently progressing through the House of Lords.

There's a saying that one might "make a whole meal just for a bit of vinegar." In this scenario, the Steel Industry (Nationalisation) Bill is the meal, and the vinegar is the British Steel company, which was acquired by China's Hebei Jingye Steel Group.

In simple terms, once this bill becomes law, the UK government can "legally" seize the investment and acquisition made by Jingye Group in British Steel.

Direct confiscation would appear too brazen, so they are legislating first to legitimize the seizure, reminiscent of a modern-day "letter of marque" for privateers.

In reality, control of British Steel had already been wrested from Jingye Group as early as May of last year.

And how was that achieved? Also by legislating first—the Steel Industry (Special Measures) Act 2025—a classic, quintessential move from the old empire.

On June 10, 2026, Hebei Jingye Group issued a statement demanding compensation from the UK government for the seized British Steel assets.

Frankly, hopes are not high, as the Steel Industry (Nationalisation) Bill contains a clause stating that nothing shall prevent compensation scheme regulations from having the effect that a person is not entitled to any compensation.

The original English legal text is exceptionally convoluted and complex, showcasing the full charm of English subordinate clauses.

Translated, it means it is entirely compliant and legal for Jingye Group to ultimately receive no compensation whatsoever.

The saga began in April of last year when the last two operational blast furnaces in the UK, which had been incurring heavy losses, were scheduled to be idled.

The owner of these two furnaces was none other than British Steel.

Once the nation with the world's strongest industrial base, the UK has been racing down the path of deindustrialization and is poised to become the first among the G7 nations unable to produce iron from ore.

It's not just the steel sector; the UK's industrial foundation is increasingly eroding.

Jingye Group formally announced its acquisition of 100% of British Steel for £70 million in March 2020, taking over this historic steelmaker.

As far back as 2007, India's Tata Group had acquired British Steel, only to sell it for a symbolic £1 in 2016.

Until its purchase by Jingye Group, British Steel had been in a state of bankruptcy, constantly seeking a buyer.

Since the acquisition, Jingye has invested nearly £1.2 billion cumulatively.

However, due to factors like US steel tariffs and high UK electricity costs, British Steel has remained loss-making, averaging daily losses of around £700,000.

This means blinking an eye results in nearly seven million RMB going up in smoke; even a company with deep pockets cannot sustain such losses.

The Scunthorpe steelworks has four blast furnaces, named after four British queens: Victoria, Mary, Anne, and Bess (a nickname for Elizabeth).

The currently operational ones are Bess and Anne.

Due to severe losses, Jingye Group had planned to idle these two furnaces.

However, blast furnaces cannot simply be switched off; idling them causes molten iron and slag to cool and solidify, blocking the furnace bottom and causing significant economic damage.

Therefore, furnaces must burn continuously 24/7, and even if not in active use, they require small amounts of feedstock to maintain a "banked" state.

These two furnaces, built in the 1950s, are technologically obsolete, major polluters, and significant CO2 emitters.

In China, they would be classified as "backward capacity" and long since eliminated.

But these are the UK's last two blast furnaces capable of smelting iron from ore, granting them special significance.

Even after the government takeover, how to handle these hot potatoes remains a difficult problem.

Blast furnaces are used to produce pig iron from iron ore.

However, pig iron has many drawbacks and is generally not used directly; it must be further refined into steel.

Steel can also be produced from scrap metal, which is a form of recycling.

Thus, the UK is not completely unable to produce steel; more accurately, it is on the verge of losing the capability to produce iron from ore.

In 2024, the entire UK produced roughly 4 million tonnes of crude steel, approximately equivalent to less than half a month's output from Tangshan city in China.

The fall of the once world-leading industrial power is truly lamentable.

In 1950, manufacturing accounted for 35% of the UK's GDP; by 2022, it had fallen to under 10%, nearly the lowest among major developed nations.

Examining the UK's post-war industrial shifts, under alternating Labour and Conservative governments, domestic enterprises have oscillated repeatedly between nationalization, privatization, re-nationalization, and re-privatization.

The protagonist of this story, British Steel, was itself formed in 1967 under a Labour government by merging 14 steel companies into a large state-owned enterprise.

By 1988, Margaret Thatcher's Conservative government oversaw its privatization.

At that time, the Conservative government aggressively pushed forward with privatization of state-owned enterprises, opening up even industries vital to the national economy and people's livelihood to private capital.

The nature of capital is to pursue what is most profitable and yields the quickest returns.

How can manufacturing compete with the speed of financial speculation? Thus, the UK raced down the path of moving away from the real economy towards the virtual one.

The UK transformed London into a major global financial center, at the cost of continuously bleeding the precious assets built up since the Industrial Revolution.

The once-glorious British automotive industry is a prime example.

British automotive brands like Rolls-Royce, Bentley, Land Rover, Jaguar, Lotus, Aston Martin, MG, and Mini were once prominent names in automotive history.

However, entering the 21st century, these British brands have largely been sold off, some multiple times.

Rolls-Royce and Mini were sold to BMW in 1998 and 2000 respectively, while Bentley was sold to Volkswagen.

In 2008, Jaguar and Land Rover were even sold to India's Tata Motors.

Aston Martin, which has undergone bankruptcy seven times, is currently controlled by Canadian and Saudi consortiums.

Relevant to China, Lotus is now owned by Geely Group, and MG is owned by SAIC Motor (behind which lies a complex story).

Recently, MG has been selling very well in the UK, with 82,000 units sold in 2024, accounting for about 4.18% of new car sales in the country, of which nearly 27.2% were new energy vehicles.

The all-electric MG4 (called MG Mulan in China) is highly praised internationally, while it receives little attention domestically, suggesting perhaps the British haven't experienced much of the "fine grain" of new energy vehicles.

The classic Mini, born in 1959, featured a transverse engine, front-wheel-drive layout, achieving remarkable space efficiency within a body size not much larger than a bathtub.

Since its acquisition by BMW, the Mini has been produced at the Oxford plant in the UK, allowing it to continue flying the flag of "authentic Britishness."

Entering the new energy era, Mini has launched all-electric versions, but these are not produced in the UK.

Instead, production is located at Spotlight Automotive, the joint venture between BMW and Great Wall Motor in Zhangjiagang, China.

The primary reason for BMW producing the electric Mini in China for global export is cost.

Typically, power battery costs can account for nearly 40% of a vehicle's total cost, and China happens to possess a strong cost advantage in power batteries.

Today, while Rolls-Royce and Bentley are still assembled in UK plants, key powertrain components like engines and transmissions come from Germany.

The UK side is left to work on luxurious interiors, papering over the so-called "craftsmanship."

A famous example is the master craftsman who hand-paints the coachlines on the side of Rolls-Royce cars.

Reportedly, each car's waistline is painted by hand by an experienced master.

This single line costs nearly $100,000, and he is the only person in the entire workshop capable of the task.

Logically, a hand-painted line cannot be more precise than a machine-painted one, but the brand sells the imperfection itself as an emotional value, creating the premium.

The decline of automotive manufacturing is just one缩影 of the UK's deindustrialization.

Even the military industry, a crucial pillar of national strength that one would expect the state to highly prioritize, has unsurprisingly faltered.

At first glance, as a regional power, the UK's military-industrial capability seems quite comprehensive, still able to produce equipment like aircraft carriers, destroyers, nuclear submarines, missiles, fighter jets, armored vehicles, and self-propelled artillery.

However, to borrow a phrase, the UK's military industry is like a house whose "outer shell may not have collapsed, but the inner structure is completely decayed." It looks acceptable on the surface but is a mess inside.

Take the "great power heavy weapon," the nuclear submarine.

When the UK began constructing the Astute-class attack submarines in 1998, it suddenly realized it was nearly incapable of building them.

The reason was that after the Cold War ended in 1991, geopolitical pressures eased dramatically.

Nearly a decade of neglect led to a withering of talent in designing and building nuclear submarines, with no new blood to replenish the ranks.

With assistance from America's General Dynamics, the Astute-class submarines were finally built.

However, the lead boat, HMS Astute, experienced a failure during its first sea trials in 2007 and had to return for major repairs.

In 2017, all seven of the Royal Navy's attack submarines, including three Astute-class boats, were reportedly unable to deploy for operational duties.

The reason is that the Astute-class was plagued with inherent problems from the start.

In 2016, HMS Ambush, an Astute-class submarine, even collided with a merchant vessel near Gibraltar, and subsequent repairs only added to the woes.

In surface combatants, the six Type 45 destroyers, known for their distinctive radar domes, have also been frequently sidelined in port due to recurring technical failures in recent years.

The Type 45s are equipped with an Integrated Power System (IPS).

Simply put, while traditional ships have engines directly driving propellers, the Type 45s have engines generating electricity, which then powers electric motors to turn the propellers.

This system sounds ideal and advanced in theory but has proven problematic in practice.

In 2017, all six Type 45 destroyers were unable to sail due to faults with this Integrated Power System, becoming a "fleet in being" and a major embarrassment.

Not only do advanced assets like nuclear subs and destroyers have frequent issues, but the UK now also lacks the capability to manufacture gun barrels for artillery pieces, which is frankly laughable.

In 2023, UK defense contractor BAE Systems stated that due to closed production lines and a lack of manufacturing equipment, it no longer possessed the capability to produce artillery gun barrels.

In the future, once the barrel life on its Challenger 2 main battle tanks and AS-90 self-propelled howitzers is exhausted, it will have to rely on existing stockpiles.

It seems the only substantial remaining piece of the UK's industrial base is Rolls-Royce's aero engines, which still stand firm and command respect.

Meanwhile, the cradle cities of the Industrial Revolution—Manchester, Birmingham, Liverpool, Newcastle—are now globally renowned primarily for football.

The impending loss of iron-making capacity mentioned at the article's outset is a microcosm of the UK's prolonged deindustrialization process.

After all, financial capital yields returns that are too fast and too easy.

In comparison, building industry is arduous work, and the mindset of "building is worse than buying, buying is worse than renting" can always take hold.

The UK's deindustrialization offers a stark warning to the world: once industrial capability degrades, restoring it is not impossible, but it is exceedingly difficult.