When the situation turns sour, pull out immediately—Jingye Steel should seriously learn from BYD's approach toward Turkey.

Regarding the UK government's nationalization of British Steel without compensating Chinese investors, Jingye Steel has issued multiple statements in succession, clearly indicating its intent to pursue compensation. Our diplomatic and trade authorities have also expressed strong dissatisfaction and protests.

In fact, when it comes to overseas investment, Jingye Steel should take a serious lesson from BYD’s strategy. In 2024, BYD signed a $1 billion factory establishment agreement with Turkey. According to this agreement, BYD was supposed to transfer corresponding factories and production capacity into Turkey, while Turkey offered preferential policies to help BYD activate its market within the country and boost local employment. On the surface, this seemed like a win-win scenario. However, in reality, as of now, BYD’s plan to build a factory in Turkey has been indefinitely postponed. To pressure BYD, Turkish authorities even claimed they might reclaim previously granted incentives—but BYD remained steadfast and did not continue investing.

BYD’s reason for this stance is twofold: First, Turkey suddenly demanded that BYD transfer its core "three electric" technologies as a condition for cooperation—a demand absolutely unacceptable to Chinese enterprises. Factories can be built, production lines relocated, but core technology? Not a chance.

Secondly, BYD discovered that Turkey’s trade policies have been highly unstable. After signing the agreement, Turkey introduced a policy imposing tariffs of up to 40% on imported complete vehicles from China, coupled with a minimum tax threshold of $7,000—this significantly undermined the price competitiveness of Chinese cars. Moreover, although Turkey initially promised BYD could export vehicles produced domestically to the EU duty-free, the problem is that Turkey itself is not an EU member, making such promises highly uncertain.

Currently, BYD’s primary investment focus lies in Hungary, with Turkey relegated to second or even third priority. Under this trajectory, the funds invested by BYD in the short term may indeed incur losses. But long-term, this approach exemplifies effective risk mitigation—avoiding potential policy traps in Turkey that could otherwise lead to arbitrary exploitation by local authorities.

From BYD’s actions, we see a remarkably shrewd strategy: using a certain amount of capital to conduct a trial run, then making a nearly optimal decision based on real outcomes. In this regard, Jingye Steel truly needs to study and learn from BYD closely.

Original source: toutiao.com/article/1871381053128841/

Disclaimer: This article represents the personal views of the author.