China’s decision to walk away from British Steel is an overtly “political act of hybrid warfare” , experts have warned. Steel-making firm Jingye’s decision to reject an offer of heavy UK subsidies it had previously called for is deliberately calculated to punish US President Donald Trump by making Western allies even more exasperated with him, while “firmly putting the UK in its place as an economic and political irrelevancy” over its continued opposition to ally Russia.
The decision comes just days after Chief of the Defence Staff Admiral Sir Tony Radakin paid a secret visit to Beijing – the first by a CDS for more than decade – ahead of the deployment of the Royal Navy carrier Prince of Wales and the Carrier Strike Group to the Ind- Pacific.
Jingye’ says the plant continues to lose £700,000 a day despite £1.2bn of investment, and claims the Scunthorpe plants two blast furnaces – essential for producing virgin steel – are no longer sustainable, blaming “highly challenging” market conditions, tariffs and costs associated with transitioning to lower-carbon production techniques.
But, since one of Xi Jinping’s first acts after coming to power in 2012 was to establish the so-called Civil-Fusion Strategy, which inexorably ended the division between Chinese civilian firms and the state in order to advance military, economic, and technological prowess, all Chinese firms now answer directly to the state.
“There isn’t any such thing as an economic deal with China. So when a move of this sort is made, it’s not principally economic in character, it’s political in character. It’s hybrid warfare,” said former British diplomat Mathew Henderson, who served in China and Hong Kong for 30 years.
He said it finally proved the futility of attempts by Sir Keir Starmer’s Government of economic rapprochement with Beijing.
“It wasn’t so long ago that Beijing described the UK as an old European country which is fitted only for study and travel – in other words, it doesn’t really matter anymore,” he added.
“They got their bugs in place in Huawei systems, captured various high-level elites and have been milking our university research dry for decades.
“We let them into the City, we let them into into our property markets, we let them into money-laundering of various sorts, and they now they have taken all they need.
“This was was a golden opportunity, after defiantly flouting the terms of the Sino-British joint declaration on Hong Kong, to pay us back for our opposition to the belligerent aggression carried out by their ally in Moscow while telling us: ‘Let’s see what you can do without us’.
“And they took it.”
Another former UK diplomat in China, Charles Parton, said: “This is a much about punishing Trump by making Western allies even more exasperated with him as it is about punishing Britain.”
Luke de Pulford, founder and Executive Director, Inter-Parliamentary Alliance on China (IPAC), said: “Jingye has treated the little that remained of the UK steel industry with utter contempt, breaching investment obligations and demanding ever increasing subsidies. It begs the question: did they ever want British Steel to succeed, or was this simply a part of Beijing’s broader competition strategy? It’s a little taster of what we can expect when we sell our critical infrastructure to China.”
He added: “At the time of the deal those of us who warned that selling our critical infrastructure to China was a bad idea were ridiculed.
“We told them about China’s own ambitions for steel production and the CCP’s desire to undermine the industrial base of democratic countries. They didn’t listen.
“You have to wonder what it’s going to take to wake them up.”