Jingye Group Demands Compensation After British Steel Nationalisation
The Chinese company that used to own British Steel says the UK government treated it unfairly and wants to be paid for its losses.
A Chinese company called Jingye Group is demanding money from the UK government after the government took control of British Steel last week. Jingye used to own British Steel, which makes steel at a large plant in Scunthorpe, England. The UK government stepped in to run the company, a move called nationalisation, saying it was needed to protect thousands of jobs and keep steel production going in Britain.
Jingye posted a statement on WeChat, a popular Chinese social media app, saying the UK's decision hurt its reputation and caused big financial losses. The company said the nationalisation 'spooked international investors' and harmed British taxpayers too. It also accused the UK government of breaking international investment rules.
The UK government had taken operational control of British Steel earlier, after Jingye considered shutting down the blast furnaces at its Scunthorpe plant. Blast furnaces are huge ovens used to melt iron ore into steel. Without them running, the plant could not make steel and thousands of workers would have lost their jobs.
Jingye bought British Steel in 2020 and said the purchase rescued the company from serious financial trouble. The Scunthorpe site has been producing steel for more than 130 years, going back to the days of the Industrial Revolution. Today, about 2,700 people work at the plant.
The UK's Department for Business and Trade made the nationalisation official on July 17. Officials said the move would protect thousands of jobs and make sure Britain has its own supply of steel. Domestic steel is important for big construction projects and for making equipment used by the military.
Jingye said it has started a formal process to seek payment under international investment agreements between China and the UK. The company said it plans to hold both the UK government and British Steel's own management legally responsible. However, the company has not shared many details about exactly how it plans to do this.
The UK government said an independent review will decide whether Jingye should receive any compensation and how much. An independent review means outside experts — not the UK government or Jingye — will look at the facts and make a recommendation. The outcome of that review is not yet known.
China's Foreign Ministry also weighed in on the dispute on Saturday. A spokesperson said the way the UK handles the situation will affect how Chinese companies view investing in Britain in the future. China urged the UK to respect market principles and find a solution that works for both sides, and said it supports its companies in using legal ways to protect their rights.
The U.K. disregarded Jingye's continuous investment and significant contribution and was only willing to provide almost zero compensation.
Comprehension quiz preview
1. Which company used to own British Steel before the UK government took control?
2. In what year did Jingye buy British Steel?
3. About how many people work at the Scunthorpe steel plant today?