April 17, 2025 • 17 mins
On this week's In the City, hosts Allegra Stratton and David Merritt delve into the likely nationalization of British Steel and how the crisis at the Chinese-owned company is forcing the Labour government to rethink its relationship with Beijing. Featuring Bloomberg Opinion columnist Matthew Brooker and senior economics reporter Philip Aldrick, the discussion probes conflicting views on China's role as a UK trade partner, and the broader economic implications amid current UK-US trade talks.
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2 (00:12):
Welcome to the City of.
Speaker 3 (00:13):
London, the City of the City of London.
Speaker 2 (00:19):
We need mind a gap between the and the financial
heart of the country.
Speaker 4 (00:29):
The City, the City.
Speaker 1 (00:31):
Welcome to in the City, Clear of the doors, pea,
Welcome to in the City. Each week we unpack a
story that's crucial to the world's financial capitals.
Speaker 4 (00:44):
I'm Alec Stratton and I'm David Merritt.
Speaker 1 (00:47):
Now this week we're looking at what can only really
be described as the near nationalization of British Steel. It
came in an historic recall of Parliament on a Saturday,
no less. Now, Dave, it was a very busy week
last week, so I imagine you were looking forward to
a bit of a break last Saturday. Yeah.
Speaker 2 (01:02):
Well, I don't think anyone's getting a break on Saturdays days,
but least of all British MPs, who, as you said,
summoned back to Westminster from their Easter holidays to talk
about this crisis at British Steel and the last remaining
production facility for steel in Britain.
Speaker 1 (01:18):
So on this episode we're joined by Bloomberg Opinion columnist
Matthew Brooker and also our senior economics reporter Phil Aldric,
who is on in the city an awful lot.
Speaker 4 (01:29):
We're going to look at.
Speaker 1 (01:30):
This crisis at British Steel that's cast a shadow over
UK China relations. Matthew, you wrote about it at the
end of your piece. He said, finally the penny is dropping.
Tell our listeners what penny is dropping?
Speaker 5 (01:42):
Were My line about the penny may drop at some
point was in relation to Douglas Alexander's visit.
Speaker 1 (01:48):
Because he's there right now. He's a trade minister and
he's in China.
Speaker 5 (01:52):
Yeah, So in the context of what was happening at
British Steel, James Murray, the Secretary for the Treasury said
clearly there's a lot of anger against Jinia, the British
Steel in trying unilatterally to shut down the last two
blast furnaces and essentially replace them with imports from China.
And James Murray was saying, in effect, all right, this
(02:14):
one owner may be a bad actor, but they're not
representative of all companies in China. China can still be
a partner. There's you know, lots of other companies there,
et cetera, et cetera. I think the UK government is
trying desperately to maintain the belief that China is not
a hostile actor, can be trusted as a trade partner,
(02:35):
and although we have certain areas of disagreements, such as
what they've done in Hong Kong, that this doesn't need
to disrupt the broader economic relationship, and that there are
ways of keeping that on track and encouraging trade and
investment with China in ways that can benefit the UK economy.
(02:56):
And I think it's very very difficult to reconcile these
two things. It's clearly not practical to cut off all
trade and investment with China. I'm not saying that there
shouldn't be any engagement, but I just think that we
should be clear eyed about it.
Speaker 1 (03:12):
We had the chance with the Exchequer in China in
January and she was very proud of six hundred million
in trade and investment in climate deals and so on.
And then more recently Ed Miliband was in China trying
to get investment into the UK's green energy industries from China. So,
not only to Matthew's point, is it schizophrenic right now
that you've got the Trade minister in China, just as
(03:34):
Parliament and Labor government seems to be very frosty towards China,
but also over time it's not clear whether they want
China to be a partner or not.
Speaker 3 (03:43):
It feels like they want to separate the hostile parts
of the Chinese state from the economic benefits that China offers.
And growth is this number one mission, this key mission
for labor, and it seems that they're hoping to be
able to just straddle contradictory position to somehow deliver this.
On the one hand, you have Jinya, which I mean
(04:05):
obviously is a private company, but as privateist thinks get
in China.
Speaker 5 (04:10):
The whole idea of companies being private, to me, it's
a meaningless distinction in China. There was a very good
backgrounder the other day by Michael Sheridan and The Independent
on on jin Yea and all right, normally it may
be a private company is absolutely steeped in Communist Party law.
I mean, the guy that started it is a former
(04:31):
Communist Party official. Its website is parently adorned with the
statements extolling how it comes from part of the sort
of holy land of Communist Party history. But even if
you have a company that's purely private and doesn't have
any connections with the Communist Party, it's still subject ultimately
to the party's control. That's just the way that China operates.
(04:52):
And we've seen this again again and again, and it's
just ludicrous and implausible, as you say, to try to
ten this distinction exists in the same way that it
does in a Western liberal democracy.
Speaker 1 (05:06):
It doesn't bill how much will the US administration be
noting the extent to which the UK government is economic
partners with China.
Speaker 3 (05:15):
It's obviously Rachel Reeves is off to Washington next week
for the are you and again Yes. The funny thing,
obviously this time, is that the Washington consensus is most
a threat from the Washington Trump presidency. I think you
know what Starmar and Reeves and they're trying to do
(05:38):
is to be these honest brokers. Someone I was speaking
to recently described it as kakism, to use a Boris
Johnson term, where you you know, you believe somehow that
you will be able to keep the US on side,
you will be able to get a new trade deal
with Europe, a better trade deal with Europe. They talk,
they're in deep talks with India at the same time
they want to keep Chinese investment in the UK while
(06:00):
running into these enormous political headwinds that you've just been
talking about, Marthy, and so you get the sense that
it went next week when they're in Washington, as long
as the talks there are focused on the UK deal
on US tariffs, that's going to be the dominant discussion,
and it does feel like other stuff is precluded from
(06:20):
those discussions at the moment. It's all quite sort of
single minded on.
Speaker 1 (06:25):
A cantalyst and I mean the one, the one pre
the tariffs that I remember we discussed in this studio
quite a bit, but it's gone disappeared a bit, but
I know is coming back. Is Shean which I always
used to mispronounce shine.
Speaker 5 (06:38):
Not the only one I know I know you have done.
Speaker 1 (06:40):
Anyway, And I think the relevance there is that you
have members of the American administration pre tariffs like Marco Rubio,
who is very very anti shiting right and the and
also has spoken on the record about being concerned about
it listing in the UK. And again the sort of
inference there being we in the US are watching what
you are doing in London and your values and the
(07:01):
kind of companies that you're choosing to let call it home,
and you know, be careful. And I think the difficulty
for kised Arma and Rachel Reeves is they've got to
make decisions. They've got to support a regime that fill's
earlier point and it is the central point that we
always come back to, gets growth for the UK economy.
Speaker 5 (07:17):
Obviously, the US is trying to force everyone to make
a choice. You're either for US or against US. They
are effectively trying to shut off trade with China with
these one hundred and forty five percent tariffs. But I mean,
maybe the US is big enough to be able to
do that.
Speaker 2 (07:31):
The UK obviously isn't right, But I guess if you
I mean, you know, the US position is obviously not
without its contradictions, isn't it. Because twenty five percent tariffs
on steel coming from Europe, including Britain, is one of
the reasons why Scunthorpe can't be profitable in itself, or
perhaps a reason why Britain might have to look to
(07:52):
and investor like China to try to keep that plant going.
The situation we're in now is where across the world
we're having the trade is getting so tangled that companies
and countries don't seem to be able to see away
through it, or what is the overall impact fell on
growth for the UK? I mean, Stele is not a
massive part of the British economy obviously, but the broader
(08:14):
question of this tangled web of trade walls obviously is
going to have a huge impact.
Speaker 4 (08:19):
Doesn't it.
Speaker 3 (08:19):
Bloomberg Economics guys have estimated to hit at about a
zero point five percent of GDP, So just lock that
off permanently within a couple of years, that'll be lost,
So it's meaningful. And obviously the lower the growth is,
the less tax revenue get you get, and the more
trouble there is for reefs in terms of meeting up
for the school rules and all of that. The last
(08:40):
thing we want as an elongated trade war, which is
obviously why I mean Reeves has said that she has
she's going to be speaking to best and shortly and
this and I think the UK Japan seems to be
at the front of this these trade negotiations with the
White House, but it feels like the UK is up
there in the sort of top three or four and
if some deal is done, you get that to twenty
five percent dropped down to ten percent. If the UK
(09:02):
has a comparative advantage over other countries because we've got
lower tariffs into the US and we've got stability because
this is all done and dusted, all of that could
just offset some of these negative effects. So it's all
moving parts still.
Speaker 1 (09:15):
When you talk to the Treasury or people around the
Chancellor or anyone in Westminster, Phil Howe, what is the mood.
Is it that it's too soon to say, or is
it that these headwinds are incredibly difficult to sail into.
Speaker 3 (09:27):
It seems very much the moment that things are moving,
and there are parts of moving, and the Americans want
to do these negotiations, and especially the fact that Beson's
been put in charge of the trade negotiations for the
US is a sign that they do want to get
deals done, because at the beginning he was so out
of the out of the loop, it seemed in his
early comments.
Speaker 1 (09:47):
And they're briefing every day that the deal's coming soon.
Speaker 3 (09:50):
They want some deals. I guess there's a victory of
sorts to be had for both sides. They have said
we're going to hit you with these tariffs if you
don't change your behavior, and we'd have to make some concessions, obviously,
and then we'd be an example of where some concessions
are made, and then we know what our stable regime is.
So that could be slightly better. But the moment, nobody
(10:10):
quite knows where it's all going to end up.
Speaker 2 (10:12):
Obviously on the longer term relations with China, some of
the conversations around this have been you know, some accusations
have been flying around right, bad acting by June. Nigel
Farage of all people, of course, has weighed in on this,
perhaps unsurprisingly being pretty blunt about the bad intentions of
the Chinese company. I mean, Matthew, you lived and worked
(10:33):
in China and Hong Kong for a long time. Do
you think this has a lasting impact because the Chinese
government have said this situation shouldn't be politicized. But is
there longer term damage if Britain does want to drum
up more investment from China and if it needs it
as well as trade with the US is challenged, what's
(10:54):
the lasting consequences of this row?
Speaker 5 (10:56):
It's difficult actually that there are some crosscurrents here. I
feel like, you know, Jingia being criticized as a bad actor.
Is it's not quite right. I mean, if they were
purely okay, the story that's come out, well, the narrative
that's been spun is that this was all part of
China's deep, long term plot to hollow out the user
(11:18):
UK's industrial base. They kind of bought it so that
they could close it down and replace it with Chinese imports,
et cetera, et cetera. I mean maybe who knows, but
I mean it doesn't seem very likely to me, because
it was insane. It was Tarta Steel, for example, which
used to own it anyway, I mean they offloaded it.
If you were just concerned about making profits, wouldn't you
(11:41):
do the same, right? I mean, nobody disputes the fact
that this thing is losing hundreds of millions of pounds
a year. There's basically zero charts of making a profit
running blast furnaces, so it seemed to me like a
completely sort of logical thing to do. They put forward
a plan to switch over to electric arc for an
which would have a chance of being profitable. That's what
(12:03):
Tartar Steel has done with the blast furnaces at Port Talbot,
and they weren't satisfied with the amount of subsidy that
the UK government was putting.
Speaker 4 (12:14):
Forward, So what else?
Speaker 5 (12:15):
What else would you expect.
Speaker 4 (12:16):
Them to do?
Speaker 5 (12:17):
But you know, we've seen more than enough from China
over the last few years to know that they shouldn't
be allowed anywhere near critical infrastructure in this country or
any any Western liberal democracy. And the idea that we
had China building a nuclear plant for us, or supposedly,
(12:38):
I think they were in the running, you know, to
build our five G infrastructure. You know, you've got to
be kidding, And I think there's no going there's no
going back.
Speaker 4 (12:47):
The sustainability part of this isn't really being talked about,
is it? On that?
Speaker 2 (12:50):
Because deeper engagement with China on eb's and on soda
and lots of things would help the government hit its targets.
And there's nothing very sustainable about about coal fired blast furnaces,
are they? And a plan to make more green steel.
It's interesting, isn't that? I find that people who clamoring
to keep this very dirty way of making steel in
Britain and not actually put forward a more sustainable plan
(13:13):
for the future which would help the comments still hit.
It's pretty ambitious targets.
Speaker 5 (13:18):
There's a lot of contradictions here, right, I mean, all
of a sudden, blast furnaces are some kind of historic
sentimental it's a heritage. Suddenly it's become a heritage access
and we must keep it. I mean, nobody said we
must keep it, so we must keep it when when
steel closed down, the blast furnaces a portal but a
(13:39):
here ago. But I mean it's it's it's almost just
it's only because of what Jingia has done that suddenly
blast furnaces must be kept. I mean, last blast furnace
why why why should they?
Speaker 4 (13:49):
Is it?
Speaker 3 (13:49):
I mean they are the last blast furnaces in the
UK and the and and the quality of steel that
you produce from the electric art furnaces that we have
just isn't up to the same standard, and that and
that does then you do get into sort of areas
of national security issues.
Speaker 5 (14:04):
I'm totally by the national security arguments, but the economic
arguments really don't don't stack up at all.
Speaker 1 (14:14):
But to pick up on that, you believe the economic
arguments don't stack up, and also we cannot really afford
to bring them onto the balance sheet.
Speaker 3 (14:22):
Can we fill the cost of keeping keeping well, they've
desperately kept trying to keep Thame's water off off the
government books, which has looked very much like a likely
nationalization candidate as well. You can structure things, because we've
got this new debt rule which you could structure things
to keep it off the balance sheet. But yeah, ultimately
(14:44):
everyone's going to see that it's a it's a cost,
and it's been losing money for god knows how long,
so it's just going to continue losing money. Of course,
would be would be obviously a great innovation, but I
mean that's certainly not going to be coming anytime soon,
so it's not an immediate solution.
Speaker 4 (15:03):
You know.
Speaker 5 (15:03):
I mean we're doing this for social and political and
arguably national security reasons, not for economic reasons. Right, nobody
should be under any illusions about that.
Speaker 1 (15:14):
So Matthew, last word to you, where do you think
it ends on UK China relations? Do you think that
we end up with considerably far lower involvement of China
in UK companies or do you think actually we bumble
along at the level we're at now having these occasional
spasms of national angst.
Speaker 5 (15:36):
Yeah, I mean I think they will carry on. I mean,
what I think because will happen and what I think
should happen maybe two different things. I mean, I think
they'll carry on trying to do what they're doing. It's
it's you know when Rachel Reeves went when in January
and came back proclaiming six hundred million pounds of trade agreements,
(15:57):
which is you know, not even a rounding.
Speaker 1 (15:59):
Era budget dust.
Speaker 5 (16:01):
But it's done nothing to deter them. And you know
you used no. No. You have the one of Rachel
Rieves's deputies at the Treasuries sing, singing the praises of
this Douglas Alexander visit. Meanwhile, he's caught up trying to
(16:23):
manage those political contradictions as well. I expect it will
carry on in the same way.
Speaker 1 (16:30):
You heard it here first. Everybody will carry on in
the same way.
Speaker 4 (16:33):
Thank you so much, Matthew and Phil.
Speaker 1 (16:39):
Thanks for listening to this week's In the City from Bloomberg.
This episode was hosted by me Alexa Stratton and David Merritt.
It was produced by Somersadi and Moses and am Brendan.
Francis Newnham is our executive producer. Special thanks to Matthew
Brooker and Phil Aldrich. Please subscribe, rate, and review wherever
(16:59):
you listen to podcasts.
Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2 (00:12):
Welcome to the City of.
Speaker 3 (00:13):
London, the City of the City of London.
Speaker 2 (00:19):
We need mind a gap between the and the financial
heart of the country.
Speaker 4 (00:29):
The City, the City.
Speaker 1 (00:31):
Welcome to in the City, Clear of the doors, pea,
Welcome to in the City. Each week we unpack a
story that's crucial to the world's financial capitals.
Speaker 4 (00:44):
I'm Alec Stratton and I'm David Merritt.
Speaker 1 (00:47):
Now this week we're looking at what can only really
be described as the near nationalization of British Steel. It
came in an historic recall of Parliament on a Saturday,
no less. Now, Dave, it was a very busy week
last week, so I imagine you were looking forward to
a bit of a break last Saturday. Yeah.
Speaker 2 (01:02):
Well, I don't think anyone's getting a break on Saturdays days,
but least of all British MPs, who, as you said,
summoned back to Westminster from their Easter holidays to talk
about this crisis at British Steel and the last remaining
production facility for steel in Britain.
Speaker 1 (01:18):
So on this episode we're joined by Bloomberg Opinion columnist
Matthew Brooker and also our senior economics reporter Phil Aldric,
who is on in the city an awful lot.
Speaker 4 (01:29):
We're going to look at.
Speaker 1 (01:30):
This crisis at British Steel that's cast a shadow over
UK China relations. Matthew, you wrote about it at the
end of your piece. He said, finally the penny is dropping.
Tell our listeners what penny is dropping?
Speaker 5 (01:42):
Were My line about the penny may drop at some
point was in relation to Douglas Alexander's visit.
Speaker 1 (01:48):
Because he's there right now. He's a trade minister and
he's in China.
Speaker 5 (01:52):
Yeah, So in the context of what was happening at
British Steel, James Murray, the Secretary for the Treasury said
clearly there's a lot of anger against Jinia, the British
Steel in trying unilatterally to shut down the last two
blast furnaces and essentially replace them with imports from China.
And James Murray was saying, in effect, all right, this
(02:14):
one owner may be a bad actor, but they're not
representative of all companies in China. China can still be
a partner. There's you know, lots of other companies there,
et cetera, et cetera. I think the UK government is
trying desperately to maintain the belief that China is not
a hostile actor, can be trusted as a trade partner,
(02:35):
and although we have certain areas of disagreements, such as
what they've done in Hong Kong, that this doesn't need
to disrupt the broader economic relationship, and that there are
ways of keeping that on track and encouraging trade and
investment with China in ways that can benefit the UK economy.
(02:56):
And I think it's very very difficult to reconcile these
two things. It's clearly not practical to cut off all
trade and investment with China. I'm not saying that there
shouldn't be any engagement, but I just think that we
should be clear eyed about it.
Speaker 1 (03:12):
We had the chance with the Exchequer in China in
January and she was very proud of six hundred million
in trade and investment in climate deals and so on.
And then more recently Ed Miliband was in China trying
to get investment into the UK's green energy industries from China. So,
not only to Matthew's point, is it schizophrenic right now
that you've got the Trade minister in China, just as
(03:34):
Parliament and Labor government seems to be very frosty towards China,
but also over time it's not clear whether they want
China to be a partner or not.
Speaker 3 (03:43):
It feels like they want to separate the hostile parts
of the Chinese state from the economic benefits that China offers.
And growth is this number one mission, this key mission
for labor, and it seems that they're hoping to be
able to just straddle contradictory position to somehow deliver this.
On the one hand, you have Jinya, which I mean
(04:05):
obviously is a private company, but as privateist thinks get
in China.
Speaker 5 (04:10):
The whole idea of companies being private, to me, it's
a meaningless distinction in China. There was a very good
backgrounder the other day by Michael Sheridan and The Independent
on on jin Yea and all right, normally it may
be a private company is absolutely steeped in Communist Party law.
I mean, the guy that started it is a former
(04:31):
Communist Party official. Its website is parently adorned with the
statements extolling how it comes from part of the sort
of holy land of Communist Party history. But even if
you have a company that's purely private and doesn't have
any connections with the Communist Party, it's still subject ultimately
to the party's control. That's just the way that China operates.
(04:52):
And we've seen this again again and again, and it's
just ludicrous and implausible, as you say, to try to
ten this distinction exists in the same way that it
does in a Western liberal democracy.
Speaker 1 (05:06):
It doesn't bill how much will the US administration be
noting the extent to which the UK government is economic
partners with China.
Speaker 3 (05:15):
It's obviously Rachel Reeves is off to Washington next week
for the are you and again Yes. The funny thing,
obviously this time, is that the Washington consensus is most
a threat from the Washington Trump presidency. I think you
know what Starmar and Reeves and they're trying to do
(05:38):
is to be these honest brokers. Someone I was speaking
to recently described it as kakism, to use a Boris
Johnson term, where you you know, you believe somehow that
you will be able to keep the US on side,
you will be able to get a new trade deal
with Europe, a better trade deal with Europe. They talk,
they're in deep talks with India at the same time
they want to keep Chinese investment in the UK while
(06:00):
running into these enormous political headwinds that you've just been
talking about, Marthy, and so you get the sense that
it went next week when they're in Washington, as long
as the talks there are focused on the UK deal
on US tariffs, that's going to be the dominant discussion,
and it does feel like other stuff is precluded from
(06:20):
those discussions at the moment. It's all quite sort of
single minded on.
Speaker 1 (06:25):
A cantalyst and I mean the one, the one pre
the tariffs that I remember we discussed in this studio
quite a bit, but it's gone disappeared a bit, but
I know is coming back. Is Shean which I always
used to mispronounce shine.
Speaker 5 (06:38):
Not the only one I know I know you have done.
Speaker 1 (06:40):
Anyway, And I think the relevance there is that you
have members of the American administration pre tariffs like Marco Rubio,
who is very very anti shiting right and the and
also has spoken on the record about being concerned about
it listing in the UK. And again the sort of
inference there being we in the US are watching what
you are doing in London and your values and the
(07:01):
kind of companies that you're choosing to let call it home,
and you know, be careful. And I think the difficulty
for kised Arma and Rachel Reeves is they've got to
make decisions. They've got to support a regime that fill's
earlier point and it is the central point that we
always come back to, gets growth for the UK economy.
Speaker 5 (07:17):
Obviously, the US is trying to force everyone to make
a choice. You're either for US or against US. They
are effectively trying to shut off trade with China with
these one hundred and forty five percent tariffs. But I mean,
maybe the US is big enough to be able to
do that.
Speaker 2 (07:31):
The UK obviously isn't right, But I guess if you
I mean, you know, the US position is obviously not
without its contradictions, isn't it. Because twenty five percent tariffs
on steel coming from Europe, including Britain, is one of
the reasons why Scunthorpe can't be profitable in itself, or
perhaps a reason why Britain might have to look to
(07:52):
and investor like China to try to keep that plant going.
The situation we're in now is where across the world
we're having the trade is getting so tangled that companies
and countries don't seem to be able to see away
through it, or what is the overall impact fell on
growth for the UK? I mean, Stele is not a
massive part of the British economy obviously, but the broader
(08:14):
question of this tangled web of trade walls obviously is
going to have a huge impact.
Speaker 4 (08:19):
Doesn't it.
Speaker 3 (08:19):
Bloomberg Economics guys have estimated to hit at about a
zero point five percent of GDP, So just lock that
off permanently within a couple of years, that'll be lost,
So it's meaningful. And obviously the lower the growth is,
the less tax revenue get you get, and the more
trouble there is for reefs in terms of meeting up
for the school rules and all of that. The last
(08:40):
thing we want as an elongated trade war, which is
obviously why I mean Reeves has said that she has
she's going to be speaking to best and shortly and
this and I think the UK Japan seems to be
at the front of this these trade negotiations with the
White House, but it feels like the UK is up
there in the sort of top three or four and
if some deal is done, you get that to twenty
five percent dropped down to ten percent. If the UK
(09:02):
has a comparative advantage over other countries because we've got
lower tariffs into the US and we've got stability because
this is all done and dusted, all of that could
just offset some of these negative effects. So it's all
moving parts still.
Speaker 1 (09:15):
When you talk to the Treasury or people around the
Chancellor or anyone in Westminster, Phil Howe, what is the mood.
Is it that it's too soon to say, or is
it that these headwinds are incredibly difficult to sail into.
Speaker 3 (09:27):
It seems very much the moment that things are moving,
and there are parts of moving, and the Americans want
to do these negotiations, and especially the fact that Beson's
been put in charge of the trade negotiations for the
US is a sign that they do want to get
deals done, because at the beginning he was so out
of the out of the loop, it seemed in his
early comments.
Speaker 1 (09:47):
And they're briefing every day that the deal's coming soon.
Speaker 3 (09:50):
They want some deals. I guess there's a victory of
sorts to be had for both sides. They have said
we're going to hit you with these tariffs if you
don't change your behavior, and we'd have to make some concessions, obviously,
and then we'd be an example of where some concessions
are made, and then we know what our stable regime is.
So that could be slightly better. But the moment, nobody
(10:10):
quite knows where it's all going to end up.
Speaker 2 (10:12):
Obviously on the longer term relations with China, some of
the conversations around this have been you know, some accusations
have been flying around right, bad acting by June. Nigel
Farage of all people, of course, has weighed in on this,
perhaps unsurprisingly being pretty blunt about the bad intentions of
the Chinese company. I mean, Matthew, you lived and worked
(10:33):
in China and Hong Kong for a long time. Do
you think this has a lasting impact because the Chinese
government have said this situation shouldn't be politicized. But is
there longer term damage if Britain does want to drum
up more investment from China and if it needs it
as well as trade with the US is challenged, what's
(10:54):
the lasting consequences of this row?
Speaker 5 (10:56):
It's difficult actually that there are some crosscurrents here. I
feel like, you know, Jingia being criticized as a bad actor.
Is it's not quite right. I mean, if they were
purely okay, the story that's come out, well, the narrative
that's been spun is that this was all part of
China's deep, long term plot to hollow out the user
(11:18):
UK's industrial base. They kind of bought it so that
they could close it down and replace it with Chinese imports,
et cetera, et cetera. I mean maybe who knows, but
I mean it doesn't seem very likely to me, because
it was insane. It was Tarta Steel, for example, which
used to own it anyway, I mean they offloaded it.
If you were just concerned about making profits, wouldn't you
(11:41):
do the same, right? I mean, nobody disputes the fact
that this thing is losing hundreds of millions of pounds
a year. There's basically zero charts of making a profit
running blast furnaces, so it seemed to me like a
completely sort of logical thing to do. They put forward
a plan to switch over to electric arc for an
which would have a chance of being profitable. That's what
(12:03):
Tartar Steel has done with the blast furnaces at Port Talbot,
and they weren't satisfied with the amount of subsidy that
the UK government was putting.
Speaker 4 (12:14):
Forward, So what else?
Speaker 5 (12:15):
What else would you expect.
Speaker 4 (12:16):
Them to do?
Speaker 5 (12:17):
But you know, we've seen more than enough from China
over the last few years to know that they shouldn't
be allowed anywhere near critical infrastructure in this country or
any any Western liberal democracy. And the idea that we
had China building a nuclear plant for us, or supposedly,
(12:38):
I think they were in the running, you know, to
build our five G infrastructure. You know, you've got to
be kidding, And I think there's no going there's no
going back.
Speaker 4 (12:47):
The sustainability part of this isn't really being talked about,
is it? On that?
Speaker 2 (12:50):
Because deeper engagement with China on eb's and on soda
and lots of things would help the government hit its targets.
And there's nothing very sustainable about about coal fired blast furnaces,
are they? And a plan to make more green steel.
It's interesting, isn't that? I find that people who clamoring
to keep this very dirty way of making steel in
Britain and not actually put forward a more sustainable plan
(13:13):
for the future which would help the comments still hit.
It's pretty ambitious targets.
Speaker 5 (13:18):
There's a lot of contradictions here, right, I mean, all
of a sudden, blast furnaces are some kind of historic
sentimental it's a heritage. Suddenly it's become a heritage access
and we must keep it. I mean, nobody said we
must keep it, so we must keep it when when
steel closed down, the blast furnaces a portal but a
(13:39):
here ago. But I mean it's it's it's almost just
it's only because of what Jingia has done that suddenly
blast furnaces must be kept. I mean, last blast furnace
why why why should they?
Speaker 4 (13:49):
Is it?
Speaker 3 (13:49):
I mean they are the last blast furnaces in the
UK and the and and the quality of steel that
you produce from the electric art furnaces that we have
just isn't up to the same standard, and that and
that does then you do get into sort of areas
of national security issues.
Speaker 5 (14:04):
I'm totally by the national security arguments, but the economic
arguments really don't don't stack up at all.
Speaker 1 (14:14):
But to pick up on that, you believe the economic
arguments don't stack up, and also we cannot really afford
to bring them onto the balance sheet.
Speaker 3 (14:22):
Can we fill the cost of keeping keeping well, they've
desperately kept trying to keep Thame's water off off the
government books, which has looked very much like a likely
nationalization candidate as well. You can structure things, because we've
got this new debt rule which you could structure things
to keep it off the balance sheet. But yeah, ultimately
(14:44):
everyone's going to see that it's a it's a cost,
and it's been losing money for god knows how long,
so it's just going to continue losing money. Of course,
would be would be obviously a great innovation, but I
mean that's certainly not going to be coming anytime soon,
so it's not an immediate solution.
Speaker 4 (15:03):
You know.
Speaker 5 (15:03):
I mean we're doing this for social and political and
arguably national security reasons, not for economic reasons. Right, nobody
should be under any illusions about that.
Speaker 1 (15:14):
So Matthew, last word to you, where do you think
it ends on UK China relations? Do you think that
we end up with considerably far lower involvement of China
in UK companies or do you think actually we bumble
along at the level we're at now having these occasional
spasms of national angst.
Speaker 5 (15:36):
Yeah, I mean I think they will carry on. I mean,
what I think because will happen and what I think
should happen maybe two different things. I mean, I think
they'll carry on trying to do what they're doing. It's
it's you know when Rachel Reeves went when in January
and came back proclaiming six hundred million pounds of trade agreements,
(15:57):
which is you know, not even a rounding.
Speaker 1 (15:59):
Era budget dust.
Speaker 5 (16:01):
But it's done nothing to deter them. And you know
you used no. No. You have the one of Rachel
Rieves's deputies at the Treasuries sing, singing the praises of
this Douglas Alexander visit. Meanwhile, he's caught up trying to
(16:23):
manage those political contradictions as well. I expect it will
carry on in the same way.
Speaker 1 (16:30):
You heard it here first. Everybody will carry on in
the same way.
Speaker 4 (16:33):
Thank you so much, Matthew and Phil.
Speaker 1 (16:39):
Thanks for listening to this week's In the City from Bloomberg.
This episode was hosted by me Alexa Stratton and David Merritt.
It was produced by Somersadi and Moses and am Brendan.
Francis Newnham is our executive producer. Special thanks to Matthew
Brooker and Phil Aldrich. Please subscribe, rate, and review wherever
(16:59):
you listen to podcasts.
Host
Francine Lacqua
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.