Chinese Firm Seeks Compensation Over British Steel Nationalisation

China’s Jingye Group has said it will seek compensation from the UK government following the nationalisation of British Steel, escalating tensions between London and Beijing over the future of the Scunthorpe steelworks.

In a statement released on Sunday, Jingye said it would pursue “full compensation through legal means to the very end” after the British government formally took the company into public ownership last week.

The UK government nationalised British Steel on Thursday, arguing that state ownership was necessary to preserve a “vital national capability” and secure the future of primary steel production in the country.

A government spokesperson said draft compensation regulations would be published in the autumn and would establish a process through which an independent assessor would determine whether any compensation is payable.

Jingye acquired British Steel in 2020, but in March last year it launched a consultation on closing the Scunthorpe plant, saying the operation was losing around £700,000 per day and was no longer financially sustainable.

The government stepped in to take operational control of the steelworks in April 2025, although ownership remained with Jingye until the formal nationalisation this week. Officials said the arrangement had limited the government’s ability to shape the company’s long-term future.

The decision has raised concerns about its impact on UK-China relations at a sensitive political moment, with a new British prime minister due to take office on Monday.

China’s Ministry of Commerce criticised the nationalisation on Friday, saying it “firmly opposes and is strongly dissatisfied with the British government’s decision”. The ministry argued that the move infringed on Jingye’s rights and interests and could damage confidence among Chinese companies investing in the UK.

Beijing also said it would support Chinese firms in protecting their legal rights, although it did not specify what measures it might take.

The UK government has maintained that negotiations with Jingye failed because no agreement could be reached that represented value for British taxpayers.

Officials stressed that Britain remains open to Chinese investment and wants to maintain a constructive trading relationship with China despite the dispute.

British Steel employs about 2,700 people directly and supports a wider network of businesses across North Lincolnshire. However, the plant has faced years of financial uncertainty and repeated questions about its viability.

A report published by the National Audit Office in March found that the government had been spending roughly £1.3 million per day to keep the operation running.

Business Secretary Peter Kyle defended the nationalisation, arguing that allowing the steelworks to close would have left the UK without the ability to produce primary steel domestically and made the country entirely dependent on overseas suppliers.

British Steel was previously state-owned before being privatised by Margaret Thatcher’s government in 1988. The latest nationalisation marks the first return of the company to public ownership in nearly four decades.