Chinese company demands compensation from the UK over British Steel nationalization
The British government took operational control of the company last year after Jingye Group said it was considering shutting down blast furnaces at its Scunthorpe plant in northern England, the last facility in the UK to produce “virgin steel” from feedstock.
Jingye Group said in a statement on WeChat that the nationalization move damaged the credibility of the British government, frightened international investors and caused huge losses in the company’s operations and British taxpayers’ funds. It also demanded that the UK government stop “trampling on international investment rules”.
Also read: UK nationalizes Chinese-owned British Steel to protect country’s steelmaking capacity
The Chinese company announced that it has initiated negotiation procedures within the scope of relevant bilateral investment agreements, reserving all its rights, including international arbitration. Jingye said he would also represent British taxpayers seeking to hold the UK government and British Steel management legally accountable. However, it was not specified how the case would be handled.
“The UK ignored Jingye’s sustained investment and significant contribution and was only willing to give almost zero compensation,” he said.
The UK government said last week that an independent assessment would be carried out to determine whether any compensation should be paid to Jingye Group. The Department for Business and Trade announced the move on July 17, saying it would save thousands of jobs and protect the UK’s national interests by ensuring supplies of domestically produced steel for major construction projects and the defense industry.
British Steel and its ancestors have been producing steel in Scunthorpe for over 130 years, benefiting from the UK’s development of advanced steelmaking technology during the Industrial Revolution. Approximately 2,700 people currently work at the factory.
Jingye bought British Steel in 2020 and said it saved the steel company from the crisis.
China’s Ministry of Foreign Affairs said on Saturday that the way Britain handles the issue will directly affect how Chinese investors view the British investment environment and the credibility of the British government.
“China urges the UK to earnestly respect market principles and contractual spirit, and find mutually acceptable solutions on compensation and other issues,” the statement said.
He added that China supports businesses in protecting their legitimate rights through legal means.
