The Chinese conglomerate that once owned British Steel is demanding compensation from the British government after lawmakers moved to nationalize the historic manufacturer, escalating a corporate dispute into a diplomatic flashpoint between London and Beijing. Jingye Group said Sunday it had initiated formal negotiation procedures under bilateral investment treaties and reserved the right to pursue international arbitration, accusing the United Kingdom of trampling on international investment rules and offering almost zero compensation for losses tied to the takeover.
The British government took operational control of British Steel last year after Jingye signaled it might shut down the blast furnaces at its Scunthorpe plant in northern England, the last facilities in the country capable of producing so-called virgin steel from raw materials. The Department for Business and Trade defended the move on July 17, framing it as a necessary step to safeguard thousands of jobs and secure a domestic steel supply critical to major construction projects and the defense industry. An independent evaluation will determine whether any compensation flows back to Jingye.
In a statement posted on WeChat, Jingye struck a combative tone, claiming the nationalization had tarnished Britain’s credibility, spooked international investors and wasted taxpayer funds. The company, which purchased British Steel out of crisis in 2020, also said it would act on behalf of British taxpayers to hold the government and plant management legally liable, though it did not explain how it planned to do so. The Scunthorpe works have been producing steel for more than 130 years and currently employ roughly 2,700 people.
Beijing has waded directly into the fray, with China’s Foreign Ministry warning Saturday that Britain’s handling of the matter would shape how Chinese investors view the UK market going forward. A ministry statement urged London to respect market principles and contractual obligations while expressing support for Chinese companies defending their rights through legal channels.
