Chinese company to the rescue of British Steel Chinese company to the rescue of British Steel

By Desmond Davies, GNA London Bureau Chief

London, Mar. 12, GNA – A leading Chinese steelmaker, Jingye Group, has acquired British Steel, which went into compulsory liquidation in May last year, pledging to invest £1.2 billion in the company to provide modern technologies and new products for the UK and global markets over the next 10 years.

The deal has safeguarded over 3,200 jobs, which the UK government said would secure “a long-term, sustainable future for steelmaking” in the North of England, a region dependent on the steel industry.

The sale follows extensive discussions between the government, the Official Receiver, Special Managers, unions, suppliers and employees.

The CEO of Jingye, Li Huiming, said: "We are delighted to have reached this agreement and look forward to completing the initial transaction over the coming days so we can begin a new chapter in British steelmaking.

“I want to thank everyone who has been involved in making this deal happen, including British Steel employees, the unions, and the British government.

“We will not misplace the trust that they have placed in us.”

In welcoming the deal, Prime Minister Boris Johnson said: “…as British Steel takes its next steps under Jingye’s leadership, we can be sure these will ring out for decades to come.

“Jingye’s pledge to invest £1.2 billion into the business is a welcome boost that will not just secure thousands of jobs, but ensure British Steel continues to prosper.”

Alok Sharma, the UK’s Business Secretary, said: “The sale of British Steel represents an important vote of confidence in the UK’s steel industry.

“It also marks the start of a new era for those regions that have built their livelihoods around industrial steel production.”

Roy Rickhuss, General Secretary of the steelworkers’ trade union, Community, said the sale had been possible because the UK government recognised “the importance of steel as a foundation industry”.

He added: “The decision to support the business through new ownership is an example of positive industrial strategy at work.

“The government can build on this with more action to create the right environment for all our steel producers to thrive.”

The UK government continues to provide support to the steel industry, including more than £300 million relief for electricity costs and public procurement.

At the same time, it is funding national infrastructure projects worth around £500 million over the next decade.

While there has been general acceptance of a Chinese company coming to the rescue of British Steel, a Chinese conglomerate, technology firm Huawei, is facing stiff opposition over the deal it has struck with the UK government to build part of its 5G infrastructure.

In January, the government awarded Huawei a contract to build "non-core" parts of its 5G network, and limited the company’s involvement at 35 per cent.

But cybersecurity concerns have been raised by the US, which is opposed to the deal.

Washington has accused Huawei of working for the Chinese government, posing a national security threat to the US, which shares intelligence with the UK.

Huawei has denied this.

This week, 38 MPs representing the Conservative Party, which has an 80-seat majority in Parliament, voted against a Bill aimed at completely removing companies that British security experts claim are "high-risk vendors", such as Huawei, from the UK’s networks by the end of 2022.

But the government won by 24 votes.

The UK’s Culture Minister, Matt Warman, said after the vote: “We will now engage intensively with colleagues across the House to make sure that we will make our case at every possible level…and we will underline that we will always put national security at the very top of our agenda.”

The Vice President of Huawei, Victor Zhang, responded by saying: "An evidence-based approach is needed, so we were disappointed to hear some groundless accusations asserted.

"The industry and experts agree that banning Huawei equipment would leave Britain less secure, less productive and less innovative."

GNA

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