China has criticized the nationalization of the U.K.’s loss-making British Steel, saying it "firmly opposes and is strongly dissatisfied with the British government's decision," according to BBC News.

The decision, announced on July 16, was characterized by the U.K. government as protecting jobs and safeguarding a "vital national capability.” British Steel said that bringing the company into public ownership was “necessary to protect the U.K.’s national interest.”

The BBC said the decision to nationalize British Steel threatens to strain the relationship between London and Beijing, just as Andy Burnham is set to become the prime minister on July 20.

The U.K. took control of British Steel's operations in Scunthorpe last year, though it was still owned by China's steelmaker, Jingye Group, limiting the government's ability to steer its future.

China's commerce ministry said on July 17 that the moves "seriously infringed upon Jingye's legitimate rights and interests and severely undermined the confidence of Chinese companies investing in the U.K.."

It also called on Britain to "faithfully fulfil" its obligations under the China–U.K. Bilateral Investment Treaty, signed in 1986, and designed to promote and protect investments between the two countries.

The U.K. government said the move came on the back of wider support for the U.K. steel sector including the first ever Steel Strategy, published in March and backed by up to £2.5 billion ($3.36 billion) of investment, which set an ambition for up to 50% of steel used in the U.K. to be made in the U.K.

This is on top of a new trade measure which limits tariff-free steel imports into the U.K. by reducing overall quota volumes by 51%, along with £500 million for Tata Steel to support its Port Talbot green steel transformation, and support for steel firms’ energy costs worth hundreds of millions of pounds per year through the Supercharger and British Industrial Competitiveness Scheme, the government said.