On Thursday, the UK government said that taking the loss-making firm into public hands would protect jobs and safeguard a "vital national capability". The UK took control of British Steel's operations in Scunthorpe last year, though it was still owned by China's Jingye Group, limiting the government's ability to steer its future. China's commerce ministry said on Friday that the moves "seriously infringed upon Jingye's legitimate rights and interests and severely undermined the confidence of Chinese companies investing in the UK".

It also called on Britain to "faithfully fulfil" its obligations under the China-UK Bilateral Investment Treaty. "Disregarding Jingye's significant contribution to the UK economy and society, the British side forcibly took control of the company in the name of national security", the ministry said. The statement added that Beijing would monitor developments closely and support Chinese firms to protect their rights, but did not specify what protecting Chinese companies' rights might involve. The decision to nationalise British Steel threatens to strain the relationship between London and Beijing just as Andy Burnham is set to become the prime minister on Monday. The incoming PM will have to weigh his approach to the issue with the economic benefits of ties with the world's second largest economy. The China-UK Bilateral Investment Treaty is a legally binding agreement that was signed in 1986. It was designed to promote and protect investments between the two countries. (BBC)