Jingye eyes 'legal remedies' as UK nationalizes steel

The United Kingdom's nationalization of British Steel, previously owned by China's Jingye Group, has drawn strong responses from the Chinese government and industry experts, who said the move undermines market principles and investor confidence while reflecting a broader global shift toward prioritizing industrial security.

Jingye Group, which acquired the loss-making steelmaker in 2020, said it had invested heavily over the past five years to upgrade facilities, improve technology and maintain operations despite prolonged financial pressure.

Following the nationalization, the company said on Sunday that it would pursue all available legal remedies, including international arbitration, to safeguard its lawful rights.

According to Jingye, the UK government proceeded with the takeover without providing timely, adequate and effective compensation for its investment. The company said it has initiated consultations under the China-UK bilateral investment treaty and reserves the right to seek full compensation for its losses.

China's Ministry of Commerce said on Friday that it firmly opposed the UK's decision, saying the move seriously harmed Jingye's legitimate rights and interests and undermined the confidence of Chinese companies investing in Britain.

It urged the UK to abide by international rules, fulfill its obligations under the China-UK bilateral investment treaty, treat Chinese-invested enterprises fairly and impartially, and properly resolve compensation issues, adding that China will continue to support companies in safeguarding their lawful rights through legal means.

Echoing the ministry's remarks, the Foreign Ministry urged Britain to respect market principles and the spirit of contract and seek a mutually acceptable solution on compensation. It warned that Britain's handling of the case would directly affect Chinese investors' assessment of the UK's investment environment and the credibility of its government.

Industry experts said the dispute also reflects profound changes in global industrial policy, as governments increasingly place strategic industries ahead of purely commercial considerations.

"Steel, once regarded by many developed economies as a sunset industry, has regained strategic importance," said Xu Xiangchun, information director and analyst at iron and steel consultancy Mysteel. "As geopolitical uncertainties grow, countries are placing greater emphasis on maintaining domestic manufacturing capacity and securing critical industrial supply chains."

Xu said the UK's decision reflects the growing importance attached to industrial security and supply chain resilience. However, he said that strategic considerations should not come at the expense of market principles or the legitimate rights of investors.

Wang Guoqing, director of the Beijing Lange Steel Information Research Center, said the nationalization ran counter to market principles, internationally accepted investment rules and the China-UK bilateral investment treaty.

She said Jingye had invested heavily to keep British Steel operating and preserve local jobs, yet the compensation mechanism announced by the UK failed to adequately reflect the company's long-term investment and contribution.

"Strategic industries deserve policy support, but government intervention should respect international investment rules and fully protect the lawful rights of investors," Wang said.

Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, said companies should strengthen policy risk assessments even when investing in developed economies, as policy and regulatory changes may arise from strategic considerations.