London has finalized legislation to seize the Chinese-owned company as G7 nations increasingly prioritize economic security over market forces.
The UK’s recent nationalization of Chinese-owned British Steel could trigger a Western domino effect to safeguard critical supply chains and slash economic reliance on China, experts say.
British Steel’s former parent company, Jingye Group, a Chinese steel conglomerate with close ties to Beijing, claimed in a July 19 statement that the British government “unlawfully expropriated Jingye’s assets.”
The company demanded that London “provide prompt, adequate and effective compensation for all losses suffered by Jingye in respect of its investment.”
China’s Ministry of Commerce weighed in on July 17, stating it supports Jingye using legal channels to defend its rights.
It said that Beijing will “take robust measures to firmly safeguard the interests of Chinese enterprises.”
The pushback follows London’s July 16 announcement that it has taken British Steel into public ownership.
The decision will help to “safeguard supply chains, major infrastructure projects and national security,” the UK government said in a statement.
In May 2019, British Steel was forced into bankruptcy because of its financial challenges, according to a government announcement.
Jingye acquired the company in March 2020.
By the end of 2023, British Steel reported 1.04 billion pounds ($1.39 billion) in liabilities, with 736 million pounds ($984 million) owed to its Chinese parent company, per a UK Parliament briefing.
‘Domino Effect’
Lin Tzuli, director of the Center for China and Regional Development at Taiwan’s Tunghai University, said the nationalization reflects a broader shift in British and European policy toward the Chinese regime.
“From Beijing’s perspective, if more European countries restrict Chinese investments over national security, it could disrupt Chinese companies’ long-term expansion in Europe,” Lin told The Epoch Times.
Lin said the steel industry carries strategic weight far beyond ordinary commodity trade, given its role in underpinning national defense, infrastructure, and energy facilities.
“China’s biggest fear is that the UK’s intervention to reclaim a Chinese-controlled company will trigger a domino effect,” he said.
Shen Ming-shih, research fellow at Taiwan’s Institute for National Defense and Security Research, said Beijing sought to leverage the company to overcome its own industrial shortcomings and broaden its global footprint.
“British steel technology is highly mature and serves as a crucial material for manufacturing advanced weapons,” Shen told The Epoch Times.
“If China secures this critical know-how, it could not only destabilize the UK market through massive dumping, but also squeeze the high-end supply chains of other nations.”
By Jarvis Lim
