Jingye, the Chinese former owner of British Steel, has demanded compensation from British taxpayers after the firm was brought into the state’s hands last week.
The Government assumed operational control of the steelmaker last year after Jingye threatened to shut down the vital blast furnaces at its Scunthorpe plant.
The furnaces are the last of their kind in Britain which still make “virgin” steel.
In a statement on Chinese platform WeChat, Jingye warned the nationalisation had damaged the British Government’s credibility and had panicked international investors.
“The UK disregarded Jingye’s continuous investment and significant contribution and was only willing to provide almost zero compensation,” the firm frothed.
It also demanded that Labour stop “trampling on international investment rules”.
Jingye said it had started negotiation procedures under investment agreements agreed between the UK and China.
And it vowed that all options were on the table – including pursuing international arbitration.
The firm also said it would represent British taxpayers in holding the UK Government and British Steel’s management legally liable.
Jingye threatened to shut down British Steel’s vital blast furnaces in Scunthorpe last year
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Jingye failed to clarify how it would handle the case.
An independent assessment will determine any compensation owed to Jingye, the Department for Business and Trade (DBT) said last week.
And Beijing itself weighed in last week, warning that China’s communist rulers were “strongly dissatisfied” with the decision.
The Chinese Foreign Ministry warned that the UK’s handling of the dispute would directly shape Chinese investors’ perceptions of Britain as a place to invest.
“China urges the UK to earnestly respect market principles and the spirit of contract, and find solutions on compensation and other issues acceptable to both sides,” the Ministry said.
It added that Beijing backs firms in defending their “legitimate interests” through legal channels.
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Nationalising the steelmakers had won cross-party support after Jingye’s initial threat last year.
And just days ago, Richard Tice – who visited the Scunthorpe works in the lead-up to last year’s emergency vote – told GB News it was the right decision to bring it into the hands of the state.
“Credit where credit is due, they’ve listened to me,” Mr Tice said. “I’ve been saying for seven years that we need to take British Steel back into public ownership and then invest in rebuilding the blast furnaces so they’re good for the next 50 years.”
But he called for further cash as he warned that Britain’s industrial capability was under threat.
“We should not be in a position of being the only G20 nation that cannot produce virgin steel. But that requires major investments into those blast furnaces,” he added.
‘Credit where credit is due, they’ve listened to me,” Richard Tice said. “I’ve been saying for seven years that we need to take British Steel back into public ownership’
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PAThe Department for Business and Trade said the move was essential to maintain steel production in Scunthorpe to protect both the company’s future and Britain’s supply chains.
Sir Keir Starmer said last Thursday: “British Steel is part of the fabric of our nation and a cornerstone of Britain’s industrial strength.
“Today’s decision secures the future of steelmaking in the UK, protects skilled jobs and safeguards a vital national capability.”
He continued: “This Government will always act in the national interest to support British industry, strengthen our economy and ensure the industries we rely on can thrive long into the future.”
The announcement followed the Steel Industry (Nationalisation) Act 2026 receiving royal assent and becoming law – the Act allows ministers to transfer steel businesses’ shares or property into state ownership.