China’s Foreign Ministry has said it will take appropriate measures to protect the interests of Chinese investors following the UK’s decision to nationalise British Steel, as former owner Jingye pursues legal action and seeks compensation for its losses.
China has said it will closely monitor the UK’s handling of British Steel’s nationalisation and will act to protect the legitimate interests of Chinese investors if necessary. The warning from Beijing’s Foreign Ministry came after Britain fully took control of the loss-making steelmaker on Thursday, ending the ownership of Chinese firm Jingye on national security grounds. Jingye has said it wants compensation for its investment and has begun legal consultations under the China-UK bilateral investment treaty, with international arbitration under consideration should no agreement be reached.
China’s response
In a statement issued on Saturday, China’s Foreign Ministry said the nationalisation “has drawn widespread attention in China” and warned that how Britain handles the matter “will directly affect Chinese investors’ confidence in the UK’s investment climate and shape public perceptions in China of the British government’s credibility.” The ministry called on the UK to pursue a mutually acceptable solution, including arrangements for compensation, and urged Britain to respect market principles and the spirit of existing investment agreements. Officials warned that the outcome of the case could influence future Chinese investment decisions in Britain.
Jingye’s position
Jingye, which acquired British Steel in 2020, says it invested more than £1.2 billion in the company and argues that the nationalisation has damaged confidence among investors considering the UK. The firm said last week that it wants the British government to compensate it for the losses incurred through its investment, and has since confirmed it has begun legal consultations under the bilateral investment treaty between China and the UK. Jingye has indicated it may pursue international arbitration if the two sides cannot agree on compensation.
The UK government’s position
The UK government has said an independent valuation will be carried out to determine whether Jingye is entitled to compensation, with legislation setting out the process expected to be introduced later this year. Ministers argue that British Steel had no commercial value at the time of nationalisation owing to its long-running financial losses, a position Jingye disputes.
Officials have defended the decision to nationalise the company as necessary to protect the UK’s last remaining blast furnaces, preserve the country’s domestic primary steelmaking capability, and safeguard thousands of jobs at the Scunthorpe plant, where British Steel’s main operations are based.
